World Bank Report On Pakistan Education Sector

i
Document of
The World Bank

Report No: ICR2432

IMPLEMENTATION COMPLETION AND RESULTS REPORT
(IDA-45860 IDA-48900 TF-98382)

ON A
CREDIT

IN THE AMOUNT OF SDR 266.2 MILLION
(US$ 400 MILLION EQUIVALENT)
TO THE
ISLAMIC REPUBLIC OF PAKISTAN
FOR
PUNJ AB EDUCATION SECTOR PROJ ECT (PESP)

December 26, 2012

Human Development Department
South Asia Region

ii

CURRENCY EQUIVALENTS

(Exchange Rate Effective J une 29, 2012)

Currency Unit =Pakistani Rupee (PKR)
US$ 1.00 =PKR 94.627

FISCAL YEAR
J uly 1 J une 30

ABBREVIATIONS AND ACRONYMS

ADP Annual Development Plan
AF Additional Financing
AY Academic Year
CAS Country Assistance Strategy
CIDA Canadian International Development Agency
CMMF Chief Ministers Monitoring Force
CPD Continuous Professional Development
CPS Country Partnership Strategy
CTSC Cluster Teacher Support Centers
DAC Departmental Accounts Committee
DCA Development Credit Agreement
DEO District Education Officer
DfID Department for International Development
DLI Disbursement Linked Indicators
DMO District Monitoring Officers
DPs Development Partners
DPC Development Policy Credit
DSD Directorate of Staff Development
DTEs District Teacher Educators
DTSC District Teacher Support Centers
EDO Executive District Officer
EEP Eligible Expenditure Program
EFO Externally Funded Output
EMIS Education Management Information System
ESMF Environmental and Social Management Framework
FAS Foundation Assisted Schools
FM Financial Management
FY Fiscal Year
GDP Gross Domestic Product
GOP Government of Pakistan
GoPunjab Government of Punjab
iii

IBRD International Bank for Reconstruction and Development
ICR Implementation Completion and Results Report
IDA International Development Association
IUFRs Interim Un-audited Financial Reports
LEAPS Learning and Educational Achievement in Punjab Schools
MEA Monitoring and Evaluation Assistant
MDGs Millennium Development Goals
MTBF Medium-Term Budgetary Framework
MTDF Medium-Term Development Framework
MTFF Medium-Term Fiscal Framework
MTSF Medium-Term Sector Framework
NEAS National Education Assessment System
NER
NPS
Net Enrollment Rate
New Program Schools
PAD Project Appraisal Document
PEAS Punjab Education Assessment System
PEC Punjab Examination Commission
PEDPC Punjab Education Development Policy Credit
PEF Punjab Education Foundation
PESAC Punjab Education Sector Adjustment Credit
PEDPC Punjab Education Sector Development Policy Credit
PESRP Punjab Education Sector Reform Program
PIHS Pakistan Integrated Household Survey
PITE Provincial Institute of Teacher Education
PMIU Program Monitoring and Implementation Unit
PDO Project Development Objectives
PPRA Public Procurement Regulatory Authority
PRSP Punjab Rural Support Program
PRSP Poverty Reduction Strategy Paper
PSLM Pakistan Social and Living Standards Measurement Survey
PTBB Punjab Textbook Board
PWD Public Works Department
SED School Education Department
SC School Council
SIL Specific Investment Lending
SMIS School Management Information System
STR Student Teacher Ratio
SWAp Sector Wide Approach
TOP Terms of Partnership
TPV Third Party Validation

iv

Vice President: Isabel M. Guerrero
Country Director: Rachid Benmessaoud
Sector Manager: Amit Dar
Project Team Leader: Huma Ali Waheed
ICR Team Leaders: Surendra Agarwal and Salman Asim
v

PAKISTAN
Punjab Education Sector Project

TABLE OF CONTENTS

Page
DATA SHEET ..................................................................................................................... i
A. Basic Information ........................................................................................................ i
B. Key Dates .................................................................................................................... i
C. Ratings Summary ........................................................................................................ i
D. Sector and Theme Codes ........................................................................................... ii
E. Bank Staff ................................................................................................................... ii
F. Results Framework Analysis ..................................................................................... iii
G. Ratings of Project Performance in ISRs ................................................................... ix
H. Restructuring (if any) ................................................................................................ ix
I. Disbursement Profile .................................................................................................. x
1. Project Context, Development Objectives and Design ................................................... 1
2. Key Factors Affecting Implementation and Outcomes .................................................. 6
3. Assessment of Outcomes .............................................................................................. 13
4. Assessment of Risk to Development Outcome ............................................................. 21
5. Assessment of Bank and Borrower Performance ......................................................... 21
6. Lessons Learned............................................................................................................ 24
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners............... 26
Annex 1. Project Costs and Financing .............................................................................. 27
Annex 2. Outputs by Component...................................................................................... 28
Annex 3. Economic and Financial Analysis ..................................................................... 31
Annex 5. Beneficiary Survey Results ............................................................................... 35
Annex 6. Stakeholder Workshop Report and Results ....................................................... 36
Annex 7. Summary of Borrower's ICR ............................................................................. 37
Annex 8. Comments of Co-financiers and Other Partners/Stakeholders .......................... 45
Annex 9. List of Supporting Documents .......................................................................... 49
MAP .................................................................................................................................. 51

i

DATA SHEET

A. Basic Information

Country: Pakistan Project Name:
Pakistan: Punjab
Education Sector
Project
Project ID: P102608 L/C/TF Number(s):
IDA-45860,IDA-
48900,TF-98382
ICR Date: 12/26/2012 ICR Type: Core ICR
Lending Instrument: SIL Borrower:
ISLAMIC REPUBLIC
OF PAKISTAN
Original Total
Commitment:
XDR 234.10M Disbursed Amount: XDR 261.10M
Revised Amount: XDR 261.10M
Environmental Category: B
Implementing Agencies:
Program Monitoring and Implementation Unit (PMIU), School Education Department (SED),
Government of Punjab
Cofinanciers and Other External Partners:
Canadian International Development Agency (CIDA)
Department for International Development (DfID)

B. Key Dates
Process Date Process Original Date
Revised / Actual
Date(s)
Concept Review: 10/30/2008 Effectiveness: 06/11/2009 06/11/2009
Appraisal: 04/15/2009 Restructuring(s): 06/06/2012
Approval: 06/04/2009 Mid-term Review: 01/31/2011 09/30/2011
Closing: 06/30/2012 06/30/2012

C. Ratings Summary
C.1 Performance Rating by ICR
Outcomes: Moderately Satisfactory
Risk to Development Outcome: Substantial
Bank Performance: Moderately Satisfactory
Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Bank Ratings Borrower Ratings
Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory
ii

Quality of Supervision: Satisfactory
Implementing
Agency/Agencies:
Satisfactory
Overall Bank
Performance:
Moderately Satisfactory
Overall Borrower
Performance:
Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators
Implementation
Performance
Indicators
QAG Assessments
(if any)
Rating
Potential Problem Project
at any time (Yes/No):
No
Quality at Entry
(QEA):
None
Problem Project at any
time (Yes/No):
No
Quality of
Supervision (QSA):
None
DO rating before
Closing/Inactive status:
Moderately
Satisfactory

D. Sector and Theme Codes
Original Actual
Sector Code (as % of total Bank financing)
Primary education 39 39
Public administration- Education 22 22
Secondary education 39 39

Theme Code (as % of total Bank financing)
Education for all 60 60
Gender 15 15
Public expenditure, financial management and procurement 25 25
E. Bank Staff
Positions At ICR At Approval
Vice President: Isabel M. Guerrero Isabel M. Guerrero
Country Director: Rachid Benmessaoud Yusupha B. Crookes
Sector Manager: Amit Dar Amit Dar
Project Team Leaders: Huma Ali Waheed Sofia Shakil and Tahseen Sayed
ICR Team Leaders: Surendra Agarwal and Salman Asim
ICR Primary Authors:
Salman Asim/
Ayesha Khan/Surendra Agarwal

iii

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)
The Project's development objectives were to improve access and equity, and the quality and
relevance of education in Punjab.

Revised Project Development Objectives (as approved by original approving authority)
The PDO was not revised.

(a) PDO Indicator(s)

Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target
Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 :
Overall, Net Enrolment Rate (NER), primary level (5-9 age group, Grades 1-5)
[female, male]
Value
(Quantitative or
Qualitative)
62% [59%, 64%]
[PSLM Survey 2006/07]
66% [62%,70%]
65%
[66%, 65%]
61% [59%, 62%]
[PSLM Survey
2010/11]
Date achieved 01/28/2008 06/30/2012 06/30/2012 09/30/2011
Comments
(incl. %
achievement)
Actual value achieved in 2010/11 was lower than baseline value (one year before
expected assessment date). PSLM survey data for 2011/12 not yet available.
Target was reduced to 65% in the AF in the wake of floods of August 2010.
Indicator 2 : Overall NER, middle level (10-12 age group, Grades 6-8)
Value
(Quantitative or
Qualitative)
20% [PSLM Survey
2006/07]
22% 24%
23%
[PSLM Survey
2010/11]
Date achieved 01/28/2008 06/30/2012 06/30/2012 09/30/2011
Comments
(incl. %
achievement)
75% of target (of expected increased in NER) achieved by 2010/11. PSLM
survey data for 2011/12 not yet available. Target was raised in AF as original
target already achieved in FY 2008/09.
Indicator 3 : Female-Male ratio NER, primary level in rural areas (5-9 age group, Grades 1-5)
Value
(Quantitative or
Qualitative)
89% [PSLM Survey
2006/07]
92%
92%
[PSLM Survey
2010/11]
Date achieved 01/28/2008 06/30/2012 09/30/2011
Comments
(incl. %
achievement)
Target achieved by 2010/11 (one year before expected assessment date). PSLM
survey data for 2011/12 not yet available.
Indicator 4 :
Female-Male ratio NER, middle level in rural areas (10-12 age group, Grades 6-
8)
Value
(Quantitative or
Qualitative)
74%
[PSLM Survey 2006/07]
78% 86%
83%
[PSLM Survey
2010/11]
Date achieved 01/28/2008 06/30/2012 06/30/2012 09/30/2011
Comments
(incl. %
75% of target (of expected Female-Male Ratio NER) achieved by 2010/11.
PSLM survey data for 2011/12 not yet available. Target was increased at AF as
iv

achievement) original targets were already achieved (82.5%). [See paragraph 1.3.1]
Indicator 5 : Primary school completion rate
Value
(Quantitative or
Qualitative)
61% 65%
55% (baseline
revised to
50%)
53.6%
[PSLM Survey
2010/11]
Date achieved 10/30/2008 06/30/2012 06/30/2012 09/30/2011
Comments
(incl. %
achievement)
Methodology for calculation and source of data (ASC replaced by PSLM)
revised during AF and target/baseline values changed accordingly. Using new
values, 72% of target achieved by 2010/11. PSLM 2011/12 data not available.
Indicator 6 : Teacher absenteeism rate
Value
(Quantitative or
Qualitative)
15.1% 10% 10%
Date achieved 03/30/2007 06/30/2012 06/30/2012
Comments
(incl. %
achievement)
Target achieved. Actual value is average for last quarter of fiscal year 2012.
Teacher absenteeism has declined since it peaked at 22% after schools were
temporarily shut down due to the floods in 2010.
Indicator 7 : Learning levels monitored through assessments and examinations
Value
(Quantitative or
Qualitative)
Grade 4 & 8 national
assessments in 4 key
subjects; Grade 5 & 8
School Examinations, and
Grade 10 matriculate
exams
Improved Quality
of Grade 5
provincial
assessments in at
least two key
subjects;
Improved quality
of national and
school exams.

In place of Grade 5
provincial
assessments, these
were done for
Grade 4 instead
(see comments);
quality of Grade 5
and Grade 8
examinations
improved.
Date achieved 05/28/2009 06/30/2012 06/30/2011
Comments
(incl. %
achievement)
14,000 Grade 4 students assessed in a district representative sample of schools in
3 subjects in 2011. An analysis report was prepared in FY2011/12. System for
Grade 5 and Grade 8 examinations established with exams held annually.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 :
Annual education budget consistent with Medium Term Sector Framework and
Medium Term Fiscal Framework [this IO indicator represents DLI1]
Value
(Quantitative
or Qualitative)
None mentioned in
project documentation
FY11 sector
program approved
with financing
levels in
accordance with
MTSF
Yes
Date achieved 06/30/2011 06/30/2011
v

Comments
(incl. %
achievement)
DLI targets met each year. Core sector program for FY09 approved and fully
financed; sector programs for FY10 and FY11 fully financed and expenditures on
track despite delays in transfers and floods in J uly-August 2010.
Indicator 2 : Improved quality of teaching [this IO indicator represents DLI2]
Value
(Quantitative
or Qualitative)
Limited teacher incentive
programs in place
Disbursement of
performance-
linked incentives
for FY11 to 20%
highest performing
schools and most
improving schools
in all districts
based on approved
criteria and
validated by third
party
-
High Achievers
program (rewards
the best performing
schools)
discontinued in
FY12; in FY12,
performance linked
incentives
payments
transferred directly
to 1028 teachers'
bank accounts
under improvers'
program (rewards
most improving
schools).
Date achieved 06/30/2008 06/30/2011 06/30/2012
Comments
(incl. %
achievement)
Targets achieved each year. High Achievers program discontinued in FY12 due
to limited impact. TPV of the program showed non-compliance with agreed
criteria and fiduciary concerns over fund transfers. Improvers program
introduced in FY11.
Indicator 3 :
Decrease in number of schools with missing facilities [this IO indicator
represents DLI3]
Value
(Quantitative
or Qualitative)
30,854 public schools
with one or more missing
facility
3,000 schools
provided missing
facilities on whole
school approach

4,754 schools
provided with
missing facilities
Date achieved 10/15/2008 06/30/2011 06/30/2012
Comments
(incl. %
achievement)
Annual DLIs were met with delays. DfID financed an additional 1,500 schools.
158.5% of target achieved by 2012. TPV (FY11) raised concerns about quality
of civil works and adherence to the whole school approach (see Annex 2).
Indicator 4 :
Increased transition (school upgradation) from primary to middle; middle to high
and high to higher secondary [this IO indicator represents DLI 4]
Value
(Quantitative
or Qualitative)
44,684 public primary
schools; 7,397 public
middle schools; 4,545
public high schools
1,400 primary
schools upgraded
to middle schools;
400 middle
schools upgraded
to high and higher
secondary

972 primary
schools upgraded to
middle schools; 578
middle schools
upgraded to high
schools
Date achieved 10/15/2008 06/30/2011 06/30/2012
Comments
(incl. %
achievement)
69% of target met for primary to middle and 144.5% for middle to high school
upgradation. Half of the DLI value was cancelled for FY11. TPV findings
showed non-compliance with the priority list of schools (Only 44 of 682 schools
were in the list).
vi

Indicator 5 :
Continued timely delivery of free textbooks to public schools [this IO indicator
represents DLI5]
Value
(quantitative
or Qualitative)
Free textbooks delivered
to 80% of public schools
(Grades 1-10)
(1) Free textbooks
delivered to at
least 90% of
public schools
within the first
month of the
academic year
beginning April
2010 (2)
Commence field
testing of selected
new books on
sample basis

(1) Free textbooks
delivered to 94% of
schools within the
first month of the
academic year (2)
Six new textbooks
developed under
new curriculum
guidelines
Date achieved 05/30/2009 06/30/2012 05/31/2012
Comments
(incl. %
achievement)
This DLI was met each year.
Indicator 6:
Timely provision of stipends to eligible girls enrolled in Grades 6-10 in public
schools [this IO indicator represents DLI6]
Value
(quantitative
or Qualitative)
% of eligible girls
enrolled in Grades 6-10 in
public schools received
stipends within the
quarter for the preceding
quarter
Delivery of
stipends to at least
90% of eligible
girls as per agreed
schedule

93%
[Monthly
Monitoring Data]
Date achieved 01/01/2009 06/30/2011 12/15/2011
Comments
(incl. %
achievement)
The targets for DLI were met every year. According to monthly monitoring data
more than 90% of eligible girls received the stipend amount for the three
program years.
Indicator 7 :
Increase in public financial support for students in low cost private schools [this
IO indicator represents DLI7]
Value
(Quantitative
or Qualitative)
Foundation Assisted
Schools (FAS) providing
support to 494,958
students; New Schools
Program (NSP) initiated
Over 1,500
schools supported
under the FAS
program, and over
200 schools
supported under
the NSP program
with appropriate
resources (PEF
budget for FY11
approved in line
with MTSF along
with a timely
quarterly transfer
of allocated funds)

1,768 schools
supported under
FAS; 200 schools
supported under
NSP program. PEF
budget allocation
and releases for
FY11 in line with
MTSF
Date achieved 06/15/2008 06/15/2011 06/15/2011
vii

Comments
(incl. %
achievement)
DLI targets fully met each year. 118% of target for schools supported under FAS
in FY11; 100% of target achieved for NSP schools. However, delays in transfer
of funds to PEF as per MTSF during Project life resulted in some delays in
implementation.
Indicator 8:
(i)Enhanced accountability of teachers; (ii) Increased capacity of SCs for
effective school management; and (iii) Reduced teacher absenteeism [this IO
indicator represents DLI 8]
Value
(quantitative
or Qualitative)
SC capacity support
provided in 6 districts in
Punjab
95% of public
primary and
middle SCs in all
35 districts
provided capacity
building through
arrangement with
RSPs, and
receiving SC
grants in their
accounts

95% of public
primary and middle
SCs in 36 districts
provided capacity
support; 97% of
SCs received grants
in a timely manner
Date achieved 06/01/2009 06/30/2011 06/30/2011
Comments
(incl. %
achievement)
DLI targets achieved each year. Progress sustained after FY11 target 95% of
SCs received grants in a timely manner by J une 15, 2012. SC guidelines
distributed to all schools.

Indicator 9 : Teachers recruited on a merit and needs basis [this IO indicator represents DLI9]
Value
(quantitative
or Qualitative)
Merit-based teacher
recruitment policy in
place. Number of teachers
to be recruited identified
on annual basis.
Implementation of
teacher
recruitment as per
agreed recruitment
plan and validated
by a third party
organization

33,299 teachers
recruited (see
comments)
Date achieved 10/15/2008 06/30/2011 06/30/2012
Comments
(incl. %
achievement)
Targets for this DLI were met each year. Recruitment initiated in FY09
according to merit based policy and 33,299 teachers recruited and placed by
FY12. TPV findings (2011/12) confirm that recruitment of teachers was
consistent with merit-based policy.

Indicator 10 :
(i)Transparent examination and assessment system (ii) Good quality information
on student learning
Value
(quantitative
or Qualitative)
3 rounds of Grade 5 & 8
exams conducted in
AY07-08; province-wide
assessment of students in
grade 4 undertaken for all
4 key subjects in AY07
(1) A province-
wide mathematics,
language and
social studies
assessment of
students in grade 5
in a district-
representative
sample of public
schools
Yes (for Grade 4)
viii

successfully
implemented by
PEAS in AY
beginning April
2010; (2) Analysis
of mathematics
assessment data
undertaken in
previous year
completed by
PEAS
Date achieved 05/30/2009 06/30/2012 05/31/2012
Comments
(incl. %
achievement)
DLI targets for each year achieved. PEC exams for Grade 5 and Grade 8
conducted annually. Assessments in social studies, maths and urdu were
administered to14,000 Grade 4 students in FY11. Analysis report prepared in FY
12.
Indicator 11 :
Reduction in outstanding audit paragraphs (provincial and district levels) in the
education sector for FY08 and FY09
Value
(quantitative
or Qualitative)
1,022 outstanding
advance audit paras for
FY07
60% reduction in
outstanding audit
paras for FY08
and FY09
60%
reduction in
outstanding
audit paras for
FY08 and
FY09
73% reduction in
outstanding audit
paras for FY08 and
FY09
Date achieved 05/30/2009 03/31/2012 04/30/2012 06/30/2012
Comments
(incl. %
achievement)
121% of target achieved for FY08 and FY09 outstanding audit paragraphs. Work
has commenced on reduction of FY10 audit paragraphs.
Indicator 12 :
Number of districts where teachers provided training and on-site support by DSD
under the CPD Framework
Value
(quantitative
or Qualitative)
6 24 36 36
Date achieved 06/15/2009 06/30/2011 06/30/2012 06/30/2012
Comments
(incl. %
achievement)
Targets for all years achieved; original target value expanded to include all 36
districts at AF.
Indicator 13 :
Development, piloting and evaluation of program for enhanced use of teacher
resource and supplementary learning material
Value
(quantitative
or Qualitative)
No Yes Target achieved
Date achieved 06/15/2009 06/15/2012 05/31/2011
Comments
(incl. %
achievement)
Achieved. Teacher guides distributed to all primary schools in the province.
Indicator 14 : Establishment of a certification, accreditation and licensing program for teachers.
Value
(quantitative
No Yes
Establishment
of a
No
ix

or Qualitative) certification
and licensing
program for
teachers
Date achieved 10/30/2008 03/31/2011 06/15/2012 05/15/2012
Comments
(incl. %
achievement)
Target not achieved. Target revised at AF to certification & licensing as national
teacher standards were being developed (accreditation at province level was
dropped). Revised covenant was dropped at restructuring and is included in
PESP-II.
Indicator 15 : School census conducted annually.
Value
(quantitative
or Qualitative)
Yes Yes Yes
Date achieved 06/30/2008 06/15/2012 05/31/2012
Comments
(incl. %
achievement)
Target achieved throughout Project life. Annual School Census conducted
annually by PMIU.

G. Ratings of Project Performance in ISRs

No.
Date ISR
Archived
DO IP
Actual
Disbursements
(USD millions)
1 07/29/2009 Satisfactory Satisfactory 122.50
2 01/29/2010 Satisfactory Moderately Satisfactory 122.50
3 09/07/2010 Moderately Satisfactory Moderately Satisfactory 232.96

H. Restructuring (if any)
Restructuring
Date(s)
Board
Approved
PDO Change
ISR Ratings at
Restructuring
Amount
Disbursed at
Restructuring
in USD
millions
Reason for Restructuring &
Key Changes Made
DO IP
06/06/2012 N MS MS 366.27
Reasons: (i) At the request of
the Government, reallocation of
unutilized funds from the
TA Component (Component 2)
of PESP to the Program
Financing Component
(Component 1); and (ii)
cancellation of one
half of the amount allocated for
the disbursement linked
x

indicator (DLI) for upgradation
of schools given that the
(sub)target for upgrading
schools from the primary to
middle level was not achieved.
The latter applies to both PESP
and PESP Additional
Financing (PESP AF).
Key changes made: As
mentioned above, and changes
to two project covenants: (a)
establishment of a teacher
accreditation and licensing
body was dropped; and (b)
preparation of a design and
execution manual for the
construction and/or
rehabilitation of schools was
also dropped.

I. Disbursement Profile

1
1. Project Context, Development Objectives and Design

1.1 Context at Appraisal
1.1.1 At the time of preparation of the Punjab Education Sector Project (PESP), Pakistans
economic growth rate had slowed down to below 4% owing to major external and internal shocks,
after having experienced a remarkable turnaround since 2000 in part as an outcome of
Government initiated reforms, as articulated in its Poverty Reduction Strategy Paper (PRSP-I,
2003). Despite the economic progress, social indicators were low and compared poorly with
those of other countries with similar levels of per capita income. The country was off track in
meeting the education Millennium Development Goals (MDGs) for 2015, which are universal
primary completion and gender parity in enrollment.

1.1.2 Punjab with a population of more than 100 million people is the most densely populated
and prosperous province of the country. With a share of about 60% of national GDP in 2006/07,
Punjabs socio-economic performance from 2002-2007 is by and large comparable to the rest of
the country; Punjabs economy grew at an annual rate of 7.6% between 2002/03 and 2006/07 and
provincial budget deficits stood at a reasonable level of 1.3% of GDP in 2007-08. While Punjabs
fiscal situation had shown improvements, there were still some worrying trends at the time of
project preparation. Overall revenue and education sector expenditures at the district level fell
short by 14% and 28% respectively, mainly on the development budget side. Weak capacity for
implementation at the district level was cited as the main reason for underutilization of the
allocated budget.

1.1.3 The results of Pakistan Social and Living Standards Measurement (PSLM) survey (2006-
07) showed improvements in health and education outcomes. In spite of these trends the
participation rates were low in the province with primary Net Enrollment Rate (NER) of 62% and
primary school completion rate of 50% in 2006/07 (PSLM survey). These low enrollment rates
were biased against girls in rural areas and poor households in the province. Transition rates from
primary to secondary level were low with middle and secondary NERs of 20% and 11%,
respectively. Lastly, the level of student achievement in the province was very low, with
independent assessments conducted by Learning and Educational Achievement in Pakistan
Schools (LEAPS), National Education Assessment System (NEAS) and Punjab Examination
Commission (PEC), all finding that students perform significantly below curricular standards for
key subjects and concepts at their grade level.

1.1.4 Major sector issues affecting the performance of public education system, and thereby
contributing to poor education outcomes were: i) insufficient resources allocated to education; ii)
inadequate district-level local capacity for planning, budgeting, managing and implementing
reforms; iii) limited parental participation and weak oversight of schools by the communities; iv)
low levels of teacher competence and accountability; v) weak support systems for teachers with
inadequate provision of materials and aids; vi) patronage-based hiring and placement of public
school teachers, potentially compromising the quality at entry and subsequent accountability; vii)
inequitable provision of missing school facilities and upgradation schemes; and viii) lack of
teacher standards and quality assurance in teacher education and professional development.

1.1.5 To address these challenges, the GoPunjab launched a sector-wide, medium-term reform
program, Punjab Education Sector Reform (PESRP), in 2003. Under this program the GoPunjab
introduced system-wide reforms, such as new teacher recruitment policies, revitalization of
school councils, restructuring of the Punjab Education Foundation (PEF) to support low-cost
private schools, conditional grants under Terms of Partnership (TOP) agreements between the
province and district governments, and Punjab Examination Commission (PEC) to regularly

2
measure student achievement through testing of Grade 5 and Grade 8 students in the province.
The reform program also introduced incentives such as provision of free textbooks to all public
school students, and stipends to girls in selected disadvantaged districts. This reform program had
received financial, technical and advisory support from the Bank through four Development
Policy Credits (20042007)
1
and a results-based Specific Investment Credit (20092012), the
Punjab Education Sector Project (PESP) and the PESP Additional Financing (AF), approved by
the Board in J une 2009 and February 2011, respectively (see Box 1).

Box 1: PESP Instrument Design:
The PESP, along with a similar education project in Sindh, was the first results-based education sector
operation in IDA countries, with four key innovative design features:
The design was performance based with disbursements tied to pre-specified annual
implementation progress and performance targets, referred to as Disbursement Linked Indicators
(DLIs). The DLIs captured intermediate results, central to the medium-term achievement of the
project development objectives.
The design was underpinned by education sector governanceinitiatives that attempted to set the
structures and incentives right for service delivery performance.
The design also supported improvements in budget and fiscal management, financial management,
procurement management, and environmental safeguard principles and practices. While the
specific focus was on the education sector, benefits of many of these improvements extended
beyond the education sector.
The design aimed at further strengthening of the monitoring and evaluation (M&E) systems.
The design likely helped in orienting and focusing the GoPunjab's efforts on agreed program
implementation progress and performance targets (see Section 2), and enabled the GoPunjab to take
forward important but politically-difficult, governance-oriented reforms by providing the desired backing
in the face of opposition from status-quo proponents. Annual set of DLIs also likely promoted steady,
incremental progress, scale up, and improvements in program implementation over the project's life.

1.1.6 Rationale for Bank Assistance: As noted above, the Bank had supported the Punjab
Education Sector Reform Program (PESRP) from 2004-2007 through a series of four Punjab
Development Policy Credits (PEDPCs). Compelling rationale for the Banks continued
engagement in the sector was to sustain fundamental and challenging policy shifts introduced
under PEDPCs. Also, in order to ensure that improved administrative systems and enhanced
governance of the sector yielded sustained gains in education outcomes, it was important to
sustain implementation continuity.

1.1.7 Higher-level Objectives: The objectives of PESP were well aligned with the priorities of
Pakistan Country Assistance Strategy (CAS, 2006a) and to the national priorities as embodied in
the Pakistan Poverty Reduction Strategy Paper (PRSP-II, 2009). At appraisal the Banks Country
Partnership Strategy (CPS) emphasized increased academic achievement of primary-school
students, reduction in gender gaps, and improvement in access to secondary schools and quality
of education. PRSP-II emphasized the need to address financing for the sector, strengthen
planning and implementation capacity, improve resource utilization, enhance governance for
greater accountability of education providers to the community, build capacity of district and
local institutions, and strengthen the role of school committees, all of which are central in PESRP
and the PESP.

1
Punjab Education Sector Adjustment Credit (PESAC), Program Document, J anuary 8, 2004 (Report No.
27528-PK); Second Punjab Education Sector Development Policy Credit (PEDPC-II), Program Document,
March 7, 2005 (Report No. 31519-PK); Third Punjab Education Sector Development Policy Credit
(PEDPC-III), Program Document, April 28, 2006 (Report No. 35441-PK); Fourth Punjab Education
Development Policy Credit (PEDPC-IV), Program Document, May 8,2007 (Report NO. 38884-PK)

3

1.2 Original Project Development Objectives (PDO) and Key Indicators
1.2.1 The project's development objectives were to improve access and equity, and the quality
and relevance of education in Punjab.

1.2.2 Success of the project in meeting its main objectives was to be measured by the key
outcome indicators (PAD page 40): NER at primary and middle levels; female/ male NER ratio at
primary and middle levels in rural areas; primary completion rate; teacher absenteeism rate and
learning levels monitored through assessment and examinations.

1.2.3 The project also regularly monitored the achievement of Disbursement Linked Indicators
(DLIs) to measure implementation success of the program. (PAD Annex 3, pages 41-43, and
PESP AF Project Paper Annex 1). Although the PAD pages 38-39 included other indicators, the
primary focus of the project was clearly on the PDO level indicators, project covenants and the
DLIs to measure project success.

1.3 Revised PDO and Key Indicators, and Reasons/Justifications
1.3.1 The PDOs for the project remained unchanged at Additional Financing. Some of the
PDO level targets were however revised in February 2011 under PESP-AF. J ustification for the
changes to PDO targets are listed below:

Primary NERs: Owing to the negative impact of floods in August 2010, the target for primary
NER was revised downwards to 65% instead of 66%.

Middle NERs: Targets for middle NERs were achieved ahead of time. Given this trend the end of
project target for this indicator was revised upwards from 22% to 24%.

Gender Parity Indicator: The end-of-project target for female-male NER ratio for middle level in
rural areas was revised upwards to 86% instead of 78%, as the original target was also achieved
ahead of time.

Primary School Completion: The indicator measuring primary school completion rate was
tracked with revised methodology/source data. Both baseline and end-line values were re-
calculated using household survey data (PSLM) instead of Annual School Census (ASC) data.
The source/methodology used initially relied on the ASC which collects data only for public
schools. It was calculated as the students in Grade 6 in year x/students in Grade 1 five years
earlier. This methodology had several limitations since it did not account for children who may
have moved to private schools for further education or dropped out after completing primary
school. The revised indicator uses data from PSLM Survey which measures population above
age 10 that has completed Grade 5, regardless of type of schooling.

1.4 Main Beneficiaries
1.4.1 PESRP was a multi-faceted program that covered the entire primary and secondary public
education sector; the child beneficiaries also included those in public-private-partnership
programs supported under PESRP/PESP. Education managers at all levels, teachers and
communities were the secondary beneficiaries of the program. PESP supported incentive
programs (distribution of free textbooks and stipends for secondary school girls) which were
expected to attract out-of-school children and improve progression rates of girls from poor
households. The program for missing school facilities/whole school improvement aimed at filling
gaps in infrastructure particularly in needy primary schools was expected to increase enrollment
by providing basic school facilities in government schools. PESP supported the public-private -
partnership program where program schools were awarded subsidies tied to attendance and

4
student achievement; the program explicitly targeted low-literacy districts in the province and
hence investments in this program disproportionately benefited the disadvantaged communities to
get free access to good quality schools. In addition, the program supported (i) low-cost schools in
un/underserved communities in the province; (ii) the timely provision of funds to school councils
and revitalization of these councils through focused capacity building effortsthrough this
intervention it was hoped that communities would play an active role in school management and
improvement; and (iii) continuous professional development (CPD) of teachers and training
workshops for district education managers.

1.5 Original Components
1.5.1 The project consisted of two components: (1) Financing of the PESRP (cost at appraisal
US $3,340 million, IDA US$340 million); and (2) Technical Assistance (IDA US$10 million).

1.5.2 Component 1 (Financing of PESRP) contributed to financing of the medium term
program of the GoPunjab that included various interventions to improve access, quality and
governance in the education sector. Disbursements under this Component were made against a set
of Eligible Expenditure Programs (EEPs) conditional on the achievement DLIs that included key
policy, institution development and output indicators, critical to achieving PDOs. Disbursements
against Component 1 were to be triggered only when at least 80% of the agreed DLIs were
achieved for the fiscal year. All DLIs were equally priced. Component 1 supported the following
four thrust areas of the PESRP:

I. Enhanced Education Sector Expenditures and Improved Fiduciary Environment:
The objective was to improve the efficiency and effectiveness of education sector expenditures,
and deepen the implementation of fiduciary reforms initiated under PEDPCs. The project
supported: i) development of medium-term expenditures and fiscal framework for the sector; ii)
improvement in the composition, quality and efficiency of sector expenditures; iii) improvements
in Financial Management (FM) practices, capacity and awareness to enhance internal controls
and financial accountability in the education sector; iv) capacity building to develop new rules for
procurement of goods and works; and v) improved procurement management in civil works,
textbooks and furniture.

II. Improved Quality of Learning: The objective was to improve school-level environment
for quality education and contribute to enhanced student learning. The project supported four key
interventions in this area: i) teacher professional development program including on-site
mentoring; ii) development and implementation of a program for enhancing quality and use of
teacher resources and supplementary learning materials; iii) pilot program for provincial teacher
accreditation system for teacher certification, licensing, and accreditation; and iv) performance-
based incentives to well-performing schools as well as additional support to low-performing
schools.

III. Improved Access and Equity: The objective was to bridge the access gap with focused
interventions to reduce regional and gender disparities. Five key interventions were supported in
this area: i) provision of missing school facilities following whole-school approach2; ii) school-
upgradation program focused on girls and southern (disadvantaged) districts of Punjab; iii)
female-stipend program explicitly targeted to 16 districts of Punjab with literacy rates below
40%; iv) timely delivery of free textbooks to all government schools; and v) increase public

2
The whole school approach entailed only one scheme (PC-1) for each school to provide all missing
school facilities (toilet, boundary wall, clean drinking water and electricity) under the same contract.

5
financial support to low-cost private schools, with support for New Schools Program targeted to
un/underserved areas.

IV. School Management, Governance and Equity: The objective was to improve sector
governance and create an enabling environment for schools to function more effectively. Five key
interventions were supported in this area: i) School Council capacity building program for
effective school management; ii) recruitment and school-specific placement of teachers on merit
and needs basis: iii) transparent examination and assessment systems to monitor student learning;
iv) strengthening of district education management capacity through multi-year training program
for district education mangers and officers; and v) strengthening of field monitoring,
mainstreaming of monitoring functions in district education departments, and enhanced capacity
for evidence-based decision making at the provincial level.

1.5.3 Component 2 (Technical Assistance, TA) was to support the fiduciary, quality, access
and governance/monitoring programs of PESP. The TA component was structured into four
separate packages to facilitate, support and coordinate efforts of the government to meet DLI and
PDO targets: i) Education Expenditures and Fiduciary Aspects; ii) Third Party Validations; iii)
Environmental Aspects; and iv) Quality, Access and Governance.

1.6 Revised Components
1.6.1 In J une 2012 at the request of GoPunjab, unutilized funds (XDR 5.1 million equivalents)
in the Technical Assistance Component (Component 2) were reallocated to the Program
Financing Component (Component 1). This reallocation was equally distributed across the 10
DLIs supported under PESP and PESP AF. Price of each DLI increased from US $11.33 million
(original) to US $11.59 million.

1.7 Other significant changes
1.7.1 Additional Financing: During project implementation Punjab suffered losses from the
floods that hit the country and province in August 2010. Self-financing of the relief and
reconstruction work by the GoPunjab resulted in finance gaps in the education sector impeding
the ability of the province to sustain expenditures on core education sector programs. In the wake
of these developments the Task Team agreed in February 2011 to provide additional financing for
PESP to support the GoPunjab in maintaining uninterrupted flow of funds to the core education
programs. The same set of 10 DLIs was supported under PESP-AF with no change in the scope of
reform activity.

1.7.2 Restructuring: The DLI related to upgradation of schools was partially met. The sub-
target for upgrading schools from middle to high level was achieved; however, the sub-target for
upgrading schools from primary to middle was not met by the time of project completion. Only
half the value of this DLI was disbursed and remaining allocation for this DLI (approximately US
$ 8.1 million) was cancelled. The cancellation was approved under level-2 restructuring in J une
2012
3
. Two project covenants were also dropped; teacher licensing and certification was
reworked and included in PESP-II, and preparation and dissemination of design and execution
manual for school construction became redundant with no new school construction planned by
GoPunjab in the medium term.

1.7.3 Co-Financing: Canadian International Development Agency (CIDA) supported PESP
with US $18.2 million under co-financing arrangements.

3
Detailed reasons for under achievement on this DLI are discussed in Annex 2.

6
1.7.4 High-level Advisory Support to the GoPunjab by DfID: In addition to the technical,
financial and advisory support to PESP provided by DfID under parallel financing arrangement
(see 2.1.5), high-level advisory support was provided to the provincial and district leadership,
including a special advisor to the Chief Minister of Punjab. The Chief Ministers Reform Road
Map was launched in 2011 with the support of this technical advisory group to provide oversight
of the reform program and ensure that the provincial and district leaders make the service agents
accountable for delivery on a set of key performance indicators.
2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry
2.1.1 Background Analysis: PESP was a three year specific investment lending (SIL) operation
that built on the successful execution of previous four Development Policy Operations (2004-
2007), and was implemented using a sector wide approach (SWAp). PESP provided
implementation continuity to sustain, deepen and expand on the accomplishments of the previous
operations, and maintain momentum for achieving development goals of the education sector.
The use of a SWAp facilitated and improved the sector dialogue and implementation pace in
supporting fiduciary and sector management systems where appropriate, while continuing to
strengthen these through DLIs and Technical Assistance. PESP helped ensure that the
GoPunjabs focus was not only on policy making but also on effective achievement of results
through improved implementation performance. Even when there was a change of provincial
Government in 2008, the program design and support from the Bank were retained, as the new
Government was cognizant of the substantial results demonstrated by the earlier operations. The
new Government made education a top priority, unambiguously stating its ownership of and
commitment to PESRP.

2.1.2 PESP was designed by the GoPunjab with technical support from the DPs, based on the
experience in implementing sector-wide reforms since 2003. During preparation, the government
and the DPs duly recognized that fundamental institutional change needs time to take root, and
this time-lag was fully reflected in setting realistic but stretch targets for the PDOs. The key
lessons learned, from the series of DPOs and analytical work conducted in the education sector
were fully reflected in the project document for PESP; these among others, included, i)
predictability of Banks support through a multi-year results based investment operation; ii) need
to address cross-sectoral issues in planning, budgeting and expenditure management through the
use of a sector-wide approach; and iii) effective monitoring and evaluation of the program to
facilitate mid-course program corrections and refinements.

2.1.3 Project Design: The SWAp design used in Punjab operation was an innovative adaptation
of the Specific Investment Lending (SIL) instrument to support sector reform initiatives while
strengthening institutions and governance, and promoting transparency. In terms of project design,
PESP was an innovative investment operation that introduced the use of DLIs in a specific
investment modality allowing the DPs to focus sector dialogue on the most critical issues
throughout the implementation period and directly linking disbursements to the achievement of
targets. These disbursements were made against a set of selected Eligible Expenditure Programs
(EEPs): teacher and sector staff salaries, girls stipends, financing of low-cost private sector,
performance-linked incentives, capacity building for school councils and districts.

2.1.4 Each DLI was priced equally and disbursements were conditional on meeting at least 8
out of the 10 DLIs each fiscal year. The DLIs were carefully selected and the hierarchical
linkages between the DLIs and PDOs clearly specified in the PAD. With the use of DLIs and
project covenants tied to performance, it was hoped that the design would contribute towards
stronger results-orientation, help maintain commitment, and intensify implementation efforts in

7
meeting desired program objectives. Also, the use of annual DLI targets was aimed at helping the
DPs in guiding their support to the implementing agencies, and strategic targeting of technical
assistance to fill knowledge gaps in support of the agreed targets and reform actions.

2.1.5 World Banks financial, technical and advisory support to the GoPunjab was
supplemented by parallel financing by the UK Department for International Development (DfID)
and a co-financing agreement signed with the Canadian International Development Agency
(CIDA). DfID contributed GBP 50 million in parallel financing disbursed against the same EEPs
and on the successful achievement of the same set of DLI targets for each fiscal year.
4
DfID
provided an additional GBP 1 million through the Externally Funded Output (EFO) mechanism to
the Bank to help support preparation and technical assistance activities for the program. As noted
in paragraph 1.7.3, CIDA co-financed PESP with a total amount of US $18.2 million. Both DfID
and CIDA held joint review missions with the World Bank during project implementation.

2.1.6 Risks and Mitigation Measures: Weak financial capacity, uncertain future of the district
governments, and inadequate capacity to implement reforms posed substantial risks to the project.
All risks were properly identified and the risk management was handled consistently and
proactively in the project design. Risks were mitigated by an appreciation of results and
successes of PEDPCs by the newly elected government that assumed Office in 2008; thus
sustaining political commitment in implementing an ambitious governance and accountability
agenda in the education sector under PESP and PESP AF.

2.1.7 Quality at Entry: No quality-at-entry assessment of the project was carried out by the
former Quality Assurance Group (QAG). A QER was conducted in February 2009 which
endorsed the project design including the PDOs and DLIs, fiduciary arrangements, and risk
assessment and mitigation measures (see Annex 9 for reference). ICR teams assessment of each
DLI from the design and implementation perspective is discussed in Annex 2; some key
observations on the overall effectiveness of the results-based design and the selection of DLIs are
summarized below.
The results-based design played an instrumental role in preserving core-sector financing
for education. In spite of devastating the floods of 2010 and the continuous fiscal stress
faced by the GoPunjab during program implementation, financing of core education
programs under PERSP was preserved.
DLIs were distributed across program pillars. Most of the selected DLIs encompassed
conditions needed to overcome budgetary, governance and accountability constraints.
Formulation and alignment of the DLI targets and protocols with the definition of the
indicators were wanting in the case of some DLIs (Page 42-43 PAD). For instance, the
basic indicator for DLI 10 was to develop a transparent examination and assessment
system with good quality information on student learning; the DLI targets and protocols,
however, focused primarily on the administration of tests and measurement of learning,
with no specific actions formulated to measure improvements in test design,
administration and analysis of the assessments.
The TA component could have been designed in more detail at entry and initial key steps
taken towards the recruitment of key consulting services to get the component ready for
timely implementation prior to approval. Significant delays in implementation of the TA
component affected selected components of the Project.

4
DfID had committed GBP 50 million for 5 years at appraisal. The period of support was later shortened to
3.5 years to match World Banks project cycle. In the middle of the PESP, DfID increased the total amount
of the grant to GBP 80 million which was linked to additional targets set by DfID on missing facilities in
five districts

8

The Quality at Entry is rated moderately satisfactory.

2.2 Implementation
2.2.1 Implementation progress remained satisfactory or moderately satisfactory throughout the
project period. For Component 1 the GoPunjab met all the DLIs with some delays except for the
(sub)-target on upgradation of schools from primary to middle level (DLI). Implementation on
Component 2 (Technical Assistance) remained slow with US $2.4 million disbursed against a
total of $10 million. The following main factors positively affected the implementation of PESP:

The results-based design of the PSEP, with disbursements explicitly tied to the
satisfactory achievement of the DLIs, helped in orienting and focusing the governments
attention on agreed program implementation progress and ratchet up efforts on achieving
KPIs. Annual DLIs promoted steady progress, scale-up, and improvements in program
implementation over the projects life.

SWAp strengthened donor collaboration and coordination ensuring that a single program
was supported by the Development Partners (DPs) and minimized the governments
capacity constraints including the reporting burden. The SIL instrument used for PESP
provided the multi-year support for implementation of sector-wide reforms. Additionally,
it contributed toward an alignment of priorities in the education sector between the Bank,
DfID and CIDA, and an exemplary partnership between the donors has evolved over the
project period, culminating in joint review missions and collaborative efforts for the
preparation of PESP-II project document.

Strong and continued government commitment was central to successful implementation
of the program and for addressing governance constraints to effective service delivery.
Many reform actions to improve the efficiency of existing inputs by altering the
governance and accountability environment required fundamental institutional changes
traditionally resisted by vested interests (e.g. merit-based teacher recruitment,
competitive textbook printing, publishing and authorship, and public financing of private
schools). Sustained government support in favor of these reforms in spite of the change in
political leadership in the province in 2008 is a testimony to the deep commitment.

Regular and sustained dialogue between the Bank, DPs and SED/PMIU and stakeholders
at the district and school level facilitated steady implementation progress in most aspects
of PESP. Technical inputs from the Task Team, including analytical reports and just-in-
time policy and technical assistance notes, supported design and implementation of key
reform actions.

2.2.2 Main factors that slowed down implementation and hindered progress included:

The floods that hit the country and the province in August 2010 caused extensive damage
to school infrastructure, disruption in school operations, loss of economic livelihoods and
displacement of households. This calamity also caused diversion of fiscal and human
resources of the provincial government towards relief and rehabilitation efforts in the
affected districts. Implementation of the mainstream education program (as was the case
with other sectors) therefore suffered a setback.

The project faced continuous challenges in translating budgetary allocations into
necessary expenditures due to delays in releases. Revenue shortfalls from a decelerating

9
economy in 2008/09 coupled with expansionary spending by the province contributed to
the fiscal stress in the early years of implementation. This situation was further
aggravated by the diversion of fiscal resources required for relief, reconstruction and
rehabilitation in the wake of the floods in 2010. Shortfall in education expenditures on
development budget side have persisted over project implementation because of capacity
constraints at the district level and diversion of allocated resources.

There was significant underutilization of available TA resources (Component 2). Many of
the administrative bottlenecks and lack of technical expertise in key sub-programs could
have been alleviated and pace of implementation increased if adequate attention was paid
to this critical component. The delays were principally due to SED/PMIUs inexperience
with Banks procurement guidelines and the early lack of appreciation for the need to
synchronize activities supported by the TA with the activities supported by the DLIs and
project covenants.

2.2.3 Quality of Supervision: No quality of supervision assessment of the project was
undertaken by the former Quality Assurance Group. The Banks Operations Committee reviewed
the implementation progress after the first year of implementation, and endorsed the Task Teams
supervision approach and efforts. Two key observations of ICR teams assessment of quality of
supervision for PESP and PESP-AF are summarized below.
Very close supervision, timely and intensive technical support across the reform program,
timely preparation of the PESP AF, and a sustained dialogue with GoPunjab despite a
challenging security environment helped in successful implementation of the project.
Intensive and sustained dialogue with implementing agencies enabled the Task Team to
keep the focus on the most critical factors necessary for the achievement of the DLI
targets.

The Quality of Supervision is rated satisfactory.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization
2.3.1 Design: The Monitoring and Information Management System set up by the School
Education Department (SED) and PMIU in Punjab is robust, streamlined and effective. The
Monitoring System in Punjab has four inter-linked pillars with varying strengths: i) internal
departmental monitoring system led by the district education official (weakest of the four); ii)
third-party monitoring system outside of the education department Chief Ministers Monitoring
Force (CMMF
5
); iii) third-party validations targeted at some of the critical areas of education
reforms in the province; and iv) systematic evaluation of student achievement through universal
examinations of Grades 5 and 8 students by Punjab Examination Commission (separate program
component) recently augmented with District Teacher Educators (DTEs) visits to examine and
track students performance and teaching quality over time. This established monitoring
framework in Punjab has resulted in strong oversight over implementation of PESP and generated
reliable data through: i) an annual school census with data feeding into the School Management
Information System (SMIS) regulated and maintained by the PMIU; ii) systematic-school wide
data collected by the Monitoring and Evaluation Assistants (MEAs) under District Monitoring
Officers (DMOs), who are responsible for monitoring school inputs under the CMMF program;

5
CMMF monitoring force comprises of ex-army men. The workforce was a stop-gap measure
adopted by the former government to improve school inspection system in the province. Under
PESP-II it is envisaged that GoPunjab will prepare and implement an institutional plan for
strengthening the capacity of the district monitoring force.

10
and iii) PEC examination databases augmented with data collected through regular class-based
visits conducted by DTEs.

2.3.2 Implementation: The M&E system under PESP provided intensive monitoring and follow-
up support at the district level for timely implementation of core education programs (such as
annual school census, rationalization exercise, civil works for missing school
facilities/upgradation programs and implementation of environmental framework). The district
education monitoring teams (DMOs, MEAs) remained the governments primary source of
monitoring and reporting on school level indicators in education (monthly inspections and annual
school census).

2.3.3 Firstly, PESP support continued strengthening and mainstreaming of this system by
making it one of the Eligible Expenditure Programs (EEPs) in addition to a set of interventions
supported under TA component, however, these capacity building interventions were not fully
realized during implementation and this critical work has been carried forward to the Second
Punjab Education Sector Reform Program (PESP-II). The district education monitoring teams
(DMOs, MEAs) at the district level were also scattered across a range of activities (health,
population census and relief work etc.)this overburdening of the officials compromised
monthly coverage of all schools by MEAs and adversely affected program implementation in
activities dependent on data collected by the district monitoring force.

2.3.4 Secondly, Punjab Examination Commission (PEC) established in 2005, recognizing the
need to measure student achievement in the province, has made impressive institutional and
administrative improvements over the project life. Staffing of key positions at PEC, supported by
PESP, strengthened operations of PEC, and enabled the institution to successfully conduct tests of
more than 1 million students (grade 5 and grade 8) annually in government schools without fail
during project implementation. Anecdotal reports from districts also confirm improvements in
examination process compared to the earlier years; however, there are still limitations and room
for improvements in test design and administration as highlighted in an independent report
commissioned by DfID in 2011.

2.3.5 Finally, the third party validation exercises for critical interventions were embedded in
the design of PESP to monitor performance and evaluate compliance with the agreed protocols
under the DLIs, such as for merit and needs based teacher recruitment, missing school facilities
and upgradation program, school council capacity building program, textbook and stipend
delivery, public private partnership program, and performance-based incentives for teachers.
There were significant delays in the implementation of these third-party validation exercises
under PESP, because of the overall delays in the execution of Component 2 by SED/PMIU. Some
of these TPVs became redundant (and were eventually dropped) by the time the TA management
firm was hired in February 2011.

2.3.6 Utilization: The M&E system in Punjab provided generally reliable data needed for
implementation of core programs and also on KPIs. Launched with the high level advisory
support of DfID, the Chief Ministers Reform Roadmap initiative relies heavily on the indicators
generated by M&E to make districts accountable for performance on certain key intermediate
indicators (like teacher presence, visits to school by district administration, student achievement
etc.). That said, utilization of M&E data in the early years of program implementation remained
wanting.

2.3.7 Firstly, limited analysis was conducted using annual school census and monthly
monitoring data, other than generating some key performance indicators at the district level.
Secondly, TPVs effectiveness was reduced during project implementation, as they were
conducted towards the end of the project cycle. That said, TPV of the High Achievers program

11
was instrumental in discontinuation of the program in FY 2012, and lessons learnt and key
recommendations of other TPVs were also useful in the preparation of PESP-II and are expected
to help the Task Team during implementation of the new operation.

2.4 Safeguard and Fiduciary Compliance
Safeguard and fiduciary compliance is rated moderately satisfactory on account of the following
achievements and issues:

2.4.1 Environmental aspects: Project activities associated with DLI 3 (School Improvement)
and DLI 4 (Increased Access to Higher Levels of Education) - which included provision of
missing facilities and upgrading schools respectively - had the potential to cause low to moderate
level of negative environmental impacts. The ESMF developed by GoPunjab was satisfactory
and covered the potential issues and their mitigation. The Deputy Director (Planning) of the
PMIU was designated as the Environmental Focal Person (EFP) with overall responsibility for
complying with the safeguards requirements supported by a full time Environment Officer. This
arrangement proved to be effective in improving the environmental performance of the Project.

2.4.2 The majority of ESMF requirements were implemented, the pace of which gradually
improved over the life of the Project. Issues with staffing were successfully resolved.
Environmental training for relevant district staff was completed and a total of 760 persons were
trained in 21 workshops. While environmental safeguards compliance remained moderately
satisfactory for most of the Project, the TPV at the end of the project found that the ESMF
implementation faced several challenges. Environmental checklists were included in the school
monitoring pro-forma; implementation quality and timeliness of some of these requirements
however remained an issue. The Public Works Department (PWD), which was responsible for
construction works, did not receive environmental training, and understanding and ownership of
the ESMF and ESMF monitoring and documentation at the district level was weak. The lessons
learned and associated recommendations included in the TPV are expected to be useful during the
implementation of the PESP-II project.

2.4.3 Social aspects: The Project was not expected to trigger any social safeguard policies.
The ESMF however included conditions to be met with donated land for school construction.
Compliance was satisfactory throughout the Project with no recorded observations of any social
safeguards violation.

2.4.4 Overall, the Project made positive social contributions by supporting the GoPunjabs
reform program in public and low-cost private education, the beneficiaries of which are from the
poorest income quintiles, as well as vulnerable and disadvantaged groups. In fact, in 2008/09,
80% of children aged 5-9 years from the poorest two asset quintiles enrolled in school were
enrolled in government schools. During the life of the Project, the ratio of female-male NER for
both primary and secondary education in rural Punjab increased from 89% (2006/07) to 92%
(2010/11) and from 74% (2006/07) to 83% (2010/11), respectively. The girls stipends program
and New School Program (NSP) administered by PEF under the PESP targeted the worst-off and
underserved areas of the province, thus enabling geographic inclusion of areas lagging far behind
in social indicators.

2.4.5 The education sector in Punjab has been the focus of a number of impact evaluations over
the last few years, presenting a rich source of findings and results on the impact of selected
program activities. Those relevant to social aspects of education are summarized briefly below.

12
Girls Stipends Program: Findings from three separate impact evaluations
6
of the girls
stipends program that targeted the 16 worst-off districts in Punjab show a positive impact
of the program on female enrolment. In addition, other results include: (a) beneficiary
adolescent girls are more likely to progress through and complete middle school; (b) girls
eligible for benefits, given in high school and exposed to the program later, increase their
rates of matriculating into and completing high school; (c) there is suggestive evidence
that participating girls delay their marriage and have fewer births by the time they are 19
years old; and (d) positive trends in enrollment are seen for boys enrollment in the
treatment districts.
GoPunjabs support to the low-cost private schooling sector through PEF: Rigorous
evaluative evidence
7
shows that the PEFs Foundation Assisted Schools (FAS) program
targeted at low-income households generated large gains (in the sub-sample of program
schools examined) in enrollment and school inputs (roughly a gain of 40%) and student
achievement (a gain of 0.30.5 standard deviations) within two years.

2.4.6 Financial Management: The financial management arrangements for the Project were
rated moderately satisfactory for most of the Project duration. Financial management
performance improved with timely reporting. The target for the reduction in advance audit
paragraphs in the education sector was surpassed (a reduction of 73% of FY08 and FY09 advance
audit paragraphs against a target of 60%); and DAC meetings were also held as planned but with
a delay. Settled observations from the advance audit paragraphs fed into the design of
interventions for improvement in the control environment in PESP II.

2.4.7 Challenges in financial management compliance pertained to the following issues:
staffing the Internal Audit Specialist (IAS) position posed a problem in 2011 onwards. While all
Project financial statements were received, their submission was not timely. Internal control
review of PMIU as a whole and capacity building in PFM of the education sector DDOs and their
accounting assistants could not be achieved despite the best efforts. Learning from the
experience of PESP, PESP II is supporting increased awareness among DDOs to enhance
compliance and systemic recommendations for simplifying and strengthening controls within the
education sector. The span of internal controls will include all aspects of the sectors functioning
of which financial controls are only a subset. PESP II will support sectoral PFM reforms using
the projects TA resources which would lead to enhanced efficiency and effectiveness of sector
expenditures such as improving budget management in the sector, capacity building of DDOs,
timely and informed decision-making, enhancing procurement effectiveness, and improving
internal controls.

2.4.8 Procurement: The Project was originally selected as one of the pilot projects for using
country systems in procurement; this was dropped after delays in the development of necessary
regulatory and legislative frameworks in the province. The Project did, however, provide a
platform to initiate dialogue with GoPunjab for the improvement of textbook procurement, a
problem area identified by the Banks initial procurement assessment.

2.4.9 Unfamiliarity of the PMIU/SED with the Banks procurement guidelines contributed to
delays in executing the recruitment of consulting services for the four TA packages under the TA
component of the Project. The resolution of these issues was discussed with the SED/PMIU on a
regular basis, and the SED/PMIU is now more familiar with Banks procurement guidelines.

6
See Chaudhury and Parajuli (2006); Hasan (2010); and Alam, Baez and Del Carpio (2011).
7
See Barrera-Osorio and Raju (2010); Barrera-Osorio and Raju (2011); and Barrera-Osorio and Raju
(forthcoming).

13
Encouragingly, simplified guidelines for procurement at the School Council level were developed
during the Project, and standard operating procedures for procurement processes and contract
management were devised in collaboration with the PMIU. Training sessions were conducted to
improve the capacity of the school councils.

2.5 Post-completion Operation/Next Phase
2.5.1 The Second Punjab Education Sector Project which was approved by the Board in April
2012 was designed to support and enable the provincial government to achieve sustainable gains
in education outcomes. The design of PESRP-II is informed by lessons derived from the
longstanding engagement of the Bank with the province in primary and secondary education
through PEDPCs and PESP.

2.5.2 The project is a US$350 million Specific Investment Credit which provides support for
the design and implementation of PESRP II, over the period from 2012 to 2015. The PDO of
PESP II is to support the education sector reform program of the GoPunjab to increase child
school participation (at multiple levels) and student achievement. Under PESRP II, GoPunjab
plans to take the next evolutionary step and zero in on improving service delivery performance at
the school level in order to realize both meaningful and continuing gains in outcomes of interest.
The results-based instrument design, specifically the use of covenants and DLIs, has aided
GoPunjab in focusing on and satisfactorily achieving the majority of agreed program
implementation progress and performance targets.

2.5.3 The new design has some refinements from PESP. To help promote sustained program
implementation, planned disbursements are fixed to increase over the project implementation
period. To promote expenditures in the EEPs (releases and expenditures were a concern under
PESP), with the exception of the first disbursement of US$45 million at project effectiveness,
PESP-II disbursements under the results-based component (Component 1) are to be on a
reimbursement basis (rather than on an advance basis as under PESP). To promote expenditures
in non-salary EEPs, total disbursements against expenditures incurred in employee-related
expenses is capped at 70% (there was no cap under PESP). To promote the utilization of TA
component to fill knowledge gaps and build capacity, the TA management firm hired in 2011 is
retained under PESP-II, and is effectively supporting achievement of the DLI targets.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation
3.1.1 Objectives and Design: The PESP objectives remained strongly relevant to Pakistans
development priorities as articulated in PRSP II (Government of Pakistan, 2009) and Country
Partnership Strategy (CPS for FY2010-13 and extension for FY2014). The key education
priorities of the PRSP II and CPS are: i) to improve access to education for all; ii) to remove
urban-rural and gender imbalances; iii) to enhance the quality of education and student learning at
all levels; d) to improve governance and management of the education sector; e) to strengthen
public expenditures, financial and procurement management; and f) to strengthen the countrys
systems and citizens capacity to demand transparency and accountability.

3.1.2 Overarching objectives of PESP were to improve composition, quality and efficiency of
education sector expenditures. The project supported on-going improvements in procurement
reforms and financial management practices within the sector. Better procurement practices in
civil works, procurement of textbooks and furniture were to be developed. PESP supported
improvements in Financial Management (FM) practices by undertaking capacity building of
education staff to follow up on outstanding audit observations. These objectives in the project
document are fully aligned with and still relevant to the priorities of the country.

14

3.1.3 The Project objectives of improving access, equity, and the quality of education in Punjab
are directly aligned with the countrys priorities. Also, the objectives to improve sector
governance and institutionalize demand-side accountability for schools to function effectively are
fully endorsed in the CPS (see paragraph 1.1.7). Furthermore, the results-framework that tracked
and measured performance of PESP on the set of process and output indicators for these
interventions (as depicted in the DLI matrix) reflected the linkages and hierarchical relationships
between PESP objectives and the Banks CPS and Governments PRSP-II.

3.1.4 Implementation: The Banks implementation support together with the DPs was and
remained responsive to the governments needs to achieving its education objectives and
priorities (enunciated in PESRP and PESRP II), and to the Banks CPS for the country and the
Education Sector Strategy 2020. The joint review missions throughout the project
implementation engaged in high-level policy dialogue contributed towards the necessary due
diligence and provided continued technical advice as needed.

3.2 Achievement of Project Development Objectives
3.2.1 PESP supported the GoPunjabs PESRP in partnership with the GoP, DfID and CIDA.
PESP provided DPs with a viable platform to coordinate and link their implementation support to
government strategy under a common results framework, jointly agreed upon with the GoPunjab
at the start of the project. The DLI matrix agreed with the GoPunjab served as a basis for
disbursements by the Bank and DfID.

3.2.2 The Project's development objectives were to improve access and equity, and the quality
and relevance of education in Punjab. Achievement of these objectives was to be measured using
seven PDO level indicators (PAD, Annex 3, page 40). Other associated key performance
indicators were also part of the results framework (PAD, Annex 3, page 38) and were to be
tracked during program implementation. The key reform sub-program under PESP and PESP-AF
and their associated DLIs, linking results to disbursements, were tightly connected with the
intermediate output indicators (status of achievement of DLIs is discussed in Annex 2).

3.2.3 At project completion, five of the seven PDO level results indicators (PAD, p.6) either
have been or are likely to be achieved (PSLM Survey data for FY2011/12 is not yet available). It
is commendable to note that original targets for the two results indicators (NER middle level and
female/male ratio NER, middle, rural areas) were achieved ahead of time and were therefore
revised upwards in PESP-AF. Table 1 below summarizes the progress on PDOs over the course
of project implementation:

15

Table 1: Progress on PDOs
PDOs
FY07
Baseline FY08 FY09 FY11
FY12
Target
NER Primary (%)
[Males, Females]
61.7%
[63.6%, 59.4%]
60.5%
[62.3%, 58.8%]
61.2%
[63.4%, 58.7%]
60.7%
[62.4%, 59.0%]
65%

NER Middle (%) 20.1% 19.0% 21.8% 22.6% 24%
Female-male ratio NER,
primary, rural (%) 89.7% 91.2% 89.3% 92.5% 92%
Female-male ratio NER,
middle, rural (%) 74.5% 91.6%
8
82.4% 82.7% 86%
Primary School
Completion Rate (%) 50.5% 51.7% 52.7% 53.6%

55%
Teacher Absenteeism
Rate (%) 15.1% - 14.0% 10.0%*

10%
Learning levels monitored
through assessments and
examinations Yes Yes Yes Yes

Notes: There are no values for FY10 as the government did not gather comparable survey data that year.
PSLM survey data for FY12 is not yet available. *Teacher absenteeism rate is estimated from Annual
School Census and hence end -of-project value is reported in the table (this refers to FY12).

PDO 1 and PDO 2: Increase school participation
Indicators: (1) Net enrollment rate (NER), for primary education (5-9 years old, 1-5 grades), (2)
Net enrollment rate (NER), for middle level (10-12 years old, 6-8 grades).

3.2.4 The project target of NER primary was 66% at preparation and revised downwards to
65% at the time of Additional Financing. PSLM survey data for FY 2011/12 is still not available
but given the trend, it is likely that primary NER values for 2011-12, when these statistics are
released, will fall short of target.
9
In addition, PESP supported low-cost private schools, the
enrollment in program schools have increased from less than 500,000 students at baseline to more
than 800,000 students at project completion. PESP-II continues to support the public-private-
partnership program to leverage the expanding private sector in the province for providing quality
low-cost schooling to hard-to-reach disadvantaged communities.

3.2.5 Stagnation in Primary NERs despite commendable achievements and progress made on
targeted interventions under Pillar 3 (Improved Access and Equity: see Annex 2) suggests the role
of exogenous shocks beyond the scope of reform program that impeded progress on PDO-1.
PESP promoted and supported GoPunjab actions under PESRP to introduce, strengthen, and help

8
Improvement in Female-male NER (rural) in 2007-08 is a statistical artifact as the impact of income-
shock on school participation is skewed towards the male children on account of two factors: i) secondary
school stipend shields the girl child from this negative shock; and ii) higher forgone earnings of boys
relative to girls also result in a differential impact. Thus, ratio-based indicators should be avoided as KPIs
as the estimator is sensitive to slight changes in the numerator and the denominator.
9
District representative household surveys conducted by DfID in 2011 showed improvements in NER
however, only PSLM data released in early 2013 could confirm these improvements. It is noted that the
data quality for PSLM 2010/11 (last available data set) could have been negatively impacted because of
floods in eight districts of Punjab that year.

16
ensure the running of education systems and institutions. While these actions were necessary they
were not sufficient for gains in outcomes to be fully realized. In addition, over the
implementation period of PESP, three exogenous factors were at play that could have adversely
impacted the performance on PDO-1. Firstly, decelerating economy coupled with increases in
commodity prices adversely affected GoPunjabs fiscal health and its ability to expand
investments in education. Although, core sector financing was preserved, implementation delays
in completion of critical outputs (i.e. provision of missing school facilities) could have stalled
progress on PDO-1. Secondly, floods in 2010 in the province could have dampened household
demand for schooling; this adversely affected the ability of poor households to pay out-of-pocket
school expenses and in some instances led to substitution away from schools to labor market for
economic sustenance. Asim et al. (2012) estimates monthly expenditures for sending a child to
public school in Sindh to be PKR 600 (this includes transportation, stationery, uniform, daily
pocket money). Given that every household has approximately 3-4 children of school going age,
this contributes to a significant amount of the monthly household income; this is consistent with
the earlier finding in the context of Punjab by LEAPS (2003) where they found that households
spend substantial sums of money on school-going children both in public and private schools
(15%-20%). Economic slow-down coupled with floods could have made it harder for the
vulnerable households (lower income quintiles) to send their children to school and this
dampening of demand could explain the downside in NERs witnessed in Punjab. Thirdly, given
the demographic trends and an expansion in the cohort of children in school-age population,
much larger investments in education were needed to accelerate the pace of growth.

3.2.6 Given these factors, the achievement of the objective to increase school participation,
primary NER (PDO-1), is rated moderately unsatisfactory. Though the GoPunjab satisfactorily
met the majority of PESP DLIs under Pillar 3 (textbooks delivery, missing school facilities and
increased support to low-cost private schools), there were delays in implementation and thus it
might take a while before gains from these interventions are fully realized.

3.2.7 Overall performance on PDO-2 is satisfactory with the initial target of 22% for middle
NER, almost achieved in 2009. The target was revised upwards to 24% under Additional
Financing (PESP-AF). Commendable achievement on this indicator is likely driven by targeted
interventions to enhance participation at the middle school level (stipends for secondary school
girls, school upgradation, and provision of missing school facilities)most of the DLIs
associated with these interventions were successfully met and likely contributed to the
improvement in the participation rates at the middle level. Even the initial reduction in the middle
school NERs because of economic slowdown in 2007/08 was reversed in the subsequent years of
program implementation and progress on this indicator is likely to have picked up pace due to the
success of the interventions under PESP. The stipends program in FY 2011/12 covered 385,000
beneficiary girls in 16 stipend districts. According to monthly monitoring inspections data
stipends were distributed to more than 90% of eligible girls every year during the project cycle.
The ICR team expects the positive trend to continue, and even the revised target to be met, once
the PSLM survey data for FY 2011/12 is released.

PDO 3 and PDO4: Reduce gender and rural-urban disparities in school participation
Indicators: (1) Female-male ratio NER, primary, rural, 5-9 years, 1-5 grades, (2) Female-male
ratio NER, middle, rural, 10-12 years old, 6-8 grades.

3.2.8 PESP made satisfactory progress towards PDO-3 and PDO-4. Overall the target for
PDO-3 (Female-male ratio NER, primary, rural) of 92% was satisfactorily achieved in FY
2010/11, and the original target for PDO-4 (Female-male ratio NER, middle, rural) of 78% was
achieved in 2008/09. The target for PDO-4 (Female-Male Ratio Middle NER, rural) was revised
upwards to 86% at Additional Financing. Incentive programs supported under PESP reduced the
direct cost of schooling (timely distribution of free textbooks and stipends program for secondary

17
school girls), enabling households to send their children to schools. Furthermore, there is
suggestive evidence that secondary girls stipends program buffeted the households against the
income-shock of 2007/08 where Female Middle NERs, unlike male indicators, showed
improvements in FY 2008 in sharp contrast to the Male Middle NERs. Strengthened delivery
mechanisms for stipends and textbooks with close monitoring by the district level monitoring
force are likely to have contributed to the achievement of this PDO. Likewise, both missing
school facilities and upgradation programs were targeted to girl schools, and have likely
contributed to the positive trend.

3.2.9 Annualized growth rates in Female Middle NER (rural) over the project period are almost
twice that for the males (4.13% and 2.0%, respectively) and suggest that the project objectives of
reducing gender and rural-urban disparities have been successfully met. Even the revised target
for PDO-4 (Female-male ratio NER, middle, rural) of 86% is likely to be achieved once PSLM
survey data for 2011-12 becomes available.

PDO 5: Increased Retention
Indicators: (1) Primary School Completion Rate (ages 10+ in the population)

3.2.10 As discussed in Section 1.3 above the methodology of estimating this PDO-level results
indicator was revised, and estimates based on this revised methodology and PSLM survey data
are reported here (as is the case in Additional Financing Project Document). Given the trend it is
likely that 55% target will be met once PSLM survey data becomes available for 2011/12.

3.2.11 Interventions under PESP (such as teacher development, placement of teachers in schools
on merit and needs basis, capacity building of school councils) were designed to directly promote
greater school quality and better school management, and through these improvements the idea
was to promote retention of students in schools. The Government of Punjab successfully met the
DLIs for these interventions and the performance on this PDO level indicator was by and large
satisfactory in spite of the exogenous shocks faced by the project during the life of project. Also
the cohorts of children who have entered the program during the implementation of PESP are yet
to complete the primary school cycle so the full effect of the program on this indicator is yet to be
realized. Moreover, the interventions under PESP were specifically formulated to promote well-
performing, robust and sustainable institutions and administrative systems. Overall, performance
on this PDO is deemed moderately satisfactory.

PDO 6 and PDO 7: Enhanced Quality of School Education
Indicators: (1) Teacher absenteeism rate; and (2) learning levels monitored through assessments
and examinations

3.2.12 One of the key factors affecting participation, retention and quality of learning is the
presence of teacher(s) in a school. Monthly monitoring system received direct support through the
Project as one of the EEPs and teacher absenteeism was regularly tracked over program
implementation. PESP supported enhanced accountability of teachers to parents and local
stakeholders through capacity building of school councils; although a full impact evaluation of
the capacity building program (by LEAPS team) is still underway, there is evidence of reduction
in teacher absenteeism from 15.1% at appraisal (March 2007) to the target level of 10% at
completion (J une, 2012). Strengthening of institutional and administrative systems could have
contributed to the successful achievement of this PDO. Overall, the progress on reducing teacher
absenteeism in the province is satisfactory.

3.3.13 To measure improvements in learning outcomes, PESP supported diagnostic assessments
of learning levels against grade competencies at Grade 4 and Grade 8 levels, and through
examinations for Grade 5 and Grade 8 students. Under PESP the Punjab Education Assessment

18
System was strengthened and successfully administered diagnostic tests of Grade 4 and Grade 8
students in sample government schools for AY-2010 and AY-2011. More than 1.4 million Grade
5 and Grade 8 public school children were tested by PEC for all three years of project
implementation. Strengthening of PEC/PEAS and improvements in test design and administration
were supported under PESP through DLIs and TA components. There are visible improvements
in examination systems for Grade 5 and Grade 8 under PEC but evidence on any improvements in
test design, analysis and dissemination of results under PEAS (diagnostic assessments) in keys
subjects is still weak. The technical capacity in PEC/PEAS needs further improvement and is
being pursued under PESP-II. Overall, the PDO-level target of demonstrating improvements in
provincial assessments of at least two key subjects is not fully met and hence this indicator is
deemed moderately satisfactory.

3.3 Efficiency
3.3.1 Efficiency in achieving the project objectives in terms of net present value (NPV) is
satisfactory. The details of the approach and assumptions are given in Annex 3.

3.3.2 At appraisal the Bank estimated the expected benefits in terms of life-time earnings of
three sets of additional beneficiaries (the numbers projected to increase because of PESP): i)
additional enrollees from the achievement of 2010-11 NER targets (primary and middle); ii)
increase in PPP enrollments; and iii) additional matriculate graduates due to improvements in
pass rate by 5% points. The costs were estimated as the sum of current and development
expenditures on the new initiatives in school education added to the direct costs of schooling
(including forgone earnings). The estimated IRR at appraisal was 9 % (PAD, page 16).

3.3.3 The ICR team thinks that the approach does not do justice to the wide-ranging
achievements of PESP that strengthened institutions and administrative systems in the province
(not picked up by gains in enrollment alone). ICR team therefore estimated life-time earnings of
all students enrolled in the system (beneficiaries of PESP) to calculate PDV of net incremental
benefits from overall investment in PESP. The PDV of expected economic costs comprised both
direct (public expenditures on public and primary schooling) and indirect (forgone labor earnings
of children age 10 and above) costs of attaining each school completion level. Over the PESP
period the deposit interest rates ran at 10% and the ICR team expects this to continue over the
long term given due to poor current and future macroeconomic conditions in the country. Setting
the discount rate equal to the deposit interest rate of 10%, we estimate a net PDV of roughly PKR
1,964 per child. A positive net PDV is necessary and sufficient for a successful investment
operation (see Annex 3).

3.4 Justification of Overall Outcome Rating
Rating: Moderately Satisfactory
3.4.1 The overall outcome is rated moderately satisfactory. The PDOs and design remained
relevant throughout project implementation and continue to do so today. Efficiency of the project
also remained satisfactory. The moderately satisfactory outcome rating reflects substantial
achievement of the projects objective to improve school participation at the middle school level
(PDO 2), reduce gender and rural disparities in education outcomes (PDO 3 and PDO 4), and
moderately satisfactory achievement in Primary School Completion Rate and measurement of
learning (PDO 5 and PDO 6). Progress has been satisfactory on a number of key performance
indicators including reduction in teacher absenteeism (Intermediate Outcome indicator) as
demonstrated by successful achievement of 29.5 of 30 program DLI targets under the results
framework (summarized in Annex 2). The project also provided implementation continuity to
some extremely challenging institutional and policy reforms initiated under Development Policy
Operations (merit based recruitment of teachers, expansion of the scale and scope of Public
Private Partnership Program, enhanced institutional capacity of Punjab Examination Commission

19
(PEC), and scale-up of capacity building support to School Councils) and these systems are
expected to have long-term benefits of improving education outcomes as the reform program and
investments are sustained.

3.4.2 Also, the SWAp design was an innovative adaptation of the SIL instrument used for the
first time under PESP, and for a similar operation in Sindh. There was a lot of learning and
experiential knowledge gained both by the GoPunjab and DPs, and the ICR team expects long-
term positive benefits of using this instrument as all stakeholders become conversant with this
approach.

3.4.3 Table 2 provides a summary of scores of different aspects of project outcomes, using a
six point scale to serve as a check on the overall assessment of the outcome rating; the result is an
outcome rating of moderately satisfactory.

Table 2: Project Outcome Evaluation Scores
Weight Score Weighted score
Relevance
Alignment with development strategy
Objectives
Design
Implementation

Efficacy
PDO 1
PDO 2
PDO 3
PDO 4
PDO 5
PDO 6
PDO 7

Efficiency
Benefits to costs
Internal efficiency
Total
0.33
0.07
0.08
0.08
0.10

0.34
0.05
0.05
0.05
0.04
0.05
0.05
0.05

0.33
0.17
0.16
1.00

6
5
4
4

3
5
5
5
4
5
4

5
5

0.42
0.40
0.32
0.40

0.15
0.25
0.25
0.20
0.20
0.25
0.20

0.85
0.80
4.69
1 =Highly Unsatisfactory, 2 =Unsatisfactory, 3 =Moderately Unsatisfactory, 4 =Moderately Satisfactory, 5 =
Satisfactory, 6 =Highly Satisfactory

3.5 Overarching Themes, Other Outcomes and Impacts
(a) Poverty Impacts, Gender Aspects, and Social Development
3.5.1 PESP addressed some aspects of poverty through targeted interventions that would
benefit those at the lowest strata of income the most. For instance, PESP continued to provide
support to the private sector (through public private partnership program) to reach less privileged
groups; the program successfully supported more than 200 low-cost private schools in localities
with limited access to functional public schools. Incentive programs in PESP (free delivery of
textbooks to public schools; and stipends for secondary school girls) also reduced the nominal
cost of schooling and are likely to have benefited more the poor and rural households. The
secondary school stipend program was targeted to sixteen low-literacy districts which are
economically the most disadvantaged part of the province.

3.5.2 PESP also supported and mainstreamed gender in education through support to female
students and teachers through specific interventions or providing an enabling environment where
female teachers would have better access to training, pay and facilities. Regular conditional cash

20
transfers offered to girls attending secondary schools in targeted districts reduced the direct cost
of sending girls to schools, and contributed to improvements in enrollment at the middle and
secondary school level (as discussed in PDO assessment above). Merit-based recruitment and
assignment of teachers in their localities created enabling conditions for more female teachers to
apply and be accepted as government school teachers. Under PESP, missing school facilities
(water, electricity, boundary wall and toilet) were provided to 4,754 schools during project
implementation. Impact on girls is likely to have been greater than on boys because the factors
such as the distance, toilets, boundary walls, and presence of female teachers are expected to have
a larger negative effect on the participation of girls than boys. Both the PDO-level targets for
reducing gender and rural-urban disparities have been successfully met reflecting gender impact
of the program.

3.5.3 Given the size of the Punjab Schools Education department (one of the largest employees
in the country with over 500,000 employees) mechanisms for teacher accountability through the
administrative system will remain weak in the medium-long term. Commendable efforts have
been made to streamline administrative procedures and strengthen merit-based recruitment of
teachers under PESP, but, given the scale of the problem, much more was required to strengthen
accountability of teachers to the communities and local stakeholders. To achieve this objective,
PESP supported the capacity building of school councils including: i) community mobilization;
ii) establishment of councils in accordance with the 2007 school council policy; iii) orientation on
roles and responsibilities of council members; and iv) development of council-level activity plans.
While this capacity building support accompanied with timely provision of resources improved
community-based accountability and social development objectives, disruption in training due to
floods in 2010 and lack of sustained efforts for a minimum of 2-3 years (key lesson from pilot
program under DPOs noted in PAD), could have dampened the likely positive benefits of this
intervention. Overall, while there is still a way to go, PESP not only adopted a participatory
approach at project preparation but deepened the social accountability agenda by enabling and
empowering parents, community members and local stakeholders in improved school governance
and management.

(b) Institutional Change/Strengthening
3.5.4 Overarching objectives of PESP were to promote well-performing, robust and
sustainable institutions and administration systems to change the long-term trajectory of
education outcomes in the sector. Key successes of the program in strengthening institutional
capacity and improved governance are as follows:

Under PESP, progress was made towards building capacity of the PMIU which has
become the primary agency in SED responsible for education policy formulation,
coordination, monitoring and evaluation of the efforts under PESP, donor coordination,
and implementation of selected activities.
PESP has supported institutional strengthening of PEC to successfully administer annual
examinations for all Grade 5 and Grade 8 government school students in the province,
with private school students encouraged to participate in these examinations.
PESP has supported the expansion and outreach of low-cost private schools under an
innovative public-private partnership program. The program has expanded from 18 to 29
program districts reaching 857,096 children in 2011 from 494,958 children at appraisal.
With subsidy payments directly linked to school performance (achievement of a
minimum level of learning) this funding mechanism creates right incentives for service
providers (private schools) to be responsive to the needs of students in program
schoolsensuring quality education is delivered in these schools.

21
Under PESP, 54,000 School councils have received annual grants and capacity building
support, since 2009, to empower parents and communities to support, monitor and
improve school operations and performance.

(c) Other Unintended Outcomes and Impacts (positive or negative)
3.5.3 The results based project design changed the nature of dialogue from focusing on inputs
to focusing on outcomes because the timing and amount of disbursements were tied to the
achievement of specified annual implementation progress and performance targets or DLIs.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops
Not applicable.
4. Assessment of Risk to Development Outcome
Rating: Substantial

4.1.1 GoPunjab is already implementing PESRP-II supported by a $350 million IDA credit
(PESP-II) taking forward the design features and successful elements of PESP. This
implementation continuity in fundamental institutional reforms supported by DPs under PESRP-
II militates against the substantive governance, economic and political risks facing the country
that could potentially dampen progress on project development outcomes.

4.1.2 Economic, political and governance risks to development outcomes are the following: i)
economic challenges facing the province such as large budgetary deficits, weak fiscal
management, expansionary spending, and worsening macroeconomic conditions and narrow tax
base for revenue mobilization; ii) general elections in 2013 and possible subsequent changes in
interests and priorities of the government; iii) weak governance environment and project-specific
vulnerabilities to outcomes (such as over-reliance on internal fiduciary controls and
accountability mechanisms); iv) volatile security situation with polarization and social tensions
on the rise; and v) persistent weak planning, budgeting and execution capacity at the provincial,
district, and school level.

4.1.3 As in PESP, the current operation (PESP-II) includes well defined mitigation measures
including (a) intensive, high quality and continuous dialogue on critical reforms between the
Bank team and the highest levels of Government, (b) strong emphasis on capacity building for
implementation, (c) oversight and support to help ensure timely and proper implementation of the
TA component, (d) technical assistance and advisory support for the analytical and due-diligence
work to better understand governance risks, (e) proactive communication with various
stakeholders on project implementation progress and performance, (f) systematic third party
validations and impact evaluations, (g) proactive implementation support missions and in case of
variable security conditions, use of virtual reviews to discuss project performance with the
GoPunjab. Despite these measures, major uncertainties justify the substantial rating of risk to
development outcomes.
5. Assessment of Bank and Borrower Performance

5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry
5.1.1 The Bank performance in ensuring quality at entry is rated moderately satisfactory. As
discussed earlier (see section 3.1), the project development objectives were strongly relevant and

22
remained relevant throughout the project, and were aligned with the Banks CPS and the
GoPunjabs priorities in the education sector (PRSP-II). The project built upon the successes and
lessons of implementation of the education sector reforms in Punjab since 2003, and from the
experiences of other countries that were implementing projects with similar instrument design,
particularly in the Latin America and Caribbean Region. The Task Team capitalized on the strong
rapport with the GoPunjab developed under DPOs and actively engaged with them in the
preparation of PESP. Throughout project preparation, the Task Team also consulted with various
stakeholders at all levels in the province and districts, and took steps to reinforce ownership and
active participation of the GoPunjab and Development Partners in the project design. In
consultation with the GoPunjab and DPs, the PESP used a results-based design with
disbursements tied to the achievements of the agreed targets in the DLI matrix.

5.1.2 The Bank team also took into account broader national and international practice and
experiences to tackle complex access and quality challenges. The PESP design was specifically
formulated to simultaneously address access issues (with a focus on gender and regional
disparities) while contributing to improvements in the quality of schooling (through teacher
professional development, merit based recruitment of teachers, and learning assessments and
examinations). In addition, PESP design reinforced and deepened interventions aimed at building
robust, sustainable institutions and administrative systems (initiated under DPOs). PESP design
paid adequate attention to the fiduciary assessment and arrangements to ensure compliance with
the Banks relevant policies and procedures. All significant risks, including weak implementation
capacity particularly at the district and school level, were recognized and mitigation measures
formulated. DLI matrix was prepared jointly by the GoPunjab, the Bank, DfID and CIDA.

5.1.3 While the overall design was commendable with the Task Team selecting the right set of
DLIs across the program pillars intended to improve conditions needed to overcome the
budgetary, governance and accountability challenges in the province, in some DLIs the linkage
between indicators and DLI targets and protocols could have been more tight (see paragraph
2.1.7). Additionally, the project design for Component 2 did not fully anticipate the weak
procurement capacity of the education department (SED/PMIU); large size of TA packages
requiring the formation of high level evaluation committees also created problems during
implementation and could have been avoided at the project design stage.

(b) Quality of Supervision
Rating: Satisfactory
5.1.4 The Bank supervision (implementation support) team was multi-disciplinary with a good
skill mix with specialists in education, poverty reduction and economic management, financial
management, social development, procurement, and legal, complemented by international and
national consultants. The continuity of this cross-sectoral team throughout PESP starting from
preparation to implementation of PESP contributed to (i) the focus on development objectives,
(ii) the effectiveness of the policy dialogue across the diverse reform programs with the higher
level government officials and the implementing agencies, and (iii) a speedy resolution of the
implementation issues as they arose. Close collaboration with the GoPunjab during project
preparation continued through implementation and the Bank team continued to provide the
necessary technical advice on important policy and implementation issues. The Bank team
jointly with the DfID, CIDA and GoPunjab reviewed project progress
10
at least two times per
year which is commendable given the variable security situation; joint review missions also

10
A mid-term review was planned but later folder into the ICR; this decision was recorded in the ISRs.
The ICR mission took place in October 2012 after the project had closed in J une 2012.

23
reduced the reporting burden on the government and harmonized support from DPs through the
agreed DLI matrix.

5.1.5 The Banks supervision could have been in hindsight more proactive in supporting the
procurement capacity at PMIU to undertake contracting of firms for large TA packages; also
there was strong need to ensure that all stakeholders in SED/PMIU (particularly provincial
leadership) had a full understanding and appreciation of the need to synchronize activities
supported by the Technical Assistance Component with activities supported by DLIs and project
covenants. EFO funds provided by DfID and the Banks TA outside of the four packages helped
in plugging in some of the critical TA needs of the program (TA support for holding DACs,
training of district staff, review of teachers incentives and civil works programs) but these
activates fell short of holistic TA program that was envisaged under each program pillar in PAD
and was to be supported under Component 2. This unfinished agenda for capacity building
however is supported under PESP-II. Overall, given intensive engagement required for such an
ambitious sector-wide operation in a challenging context coupled with timely preparation of
Additional Financing and PESP-II, the performance of quality of supervision on PESP was
satisfactory.

(c) Justification of Rating for Overall Bank Performance
5.1.6 The Banks overall performance is rated moderately satisfactory, considering the above
assessment in assuring quality at entry and quality of supervision.

5.2 Borrower Performance
(a) Government Performance
5.2.1 The GoPunjabs ownership and commitment to the project and to its successful
implementation to achieve development objectives was strong. GoPunjab approved and
implemented the education budget, including PESP expenditures, consistent with the medium-
term sector framework (MTSF). Despite the fiscal stress faced by the province and adverse
impact on development budget resulting from floods in August 2010 the GoPunjab protected the
education budget and released funds for core programs as needed, albeit with delays at times.
GoPunjab demonstrated its strong commitment to its PDOs by instituting several politically
difficult reforms such as the merit based recruitment of teachers, expansion of the scale and scope
of public-private-partnership program to leverage funds to low-cost private schools; strengthening
of student assessments and examination systems; and publishing of all textbooks through an open
competitive process.

5.2.2 However, there are few areas where Governments performance was wanting. For
example (i) the Provincial Steering Committee (PSC) composed of the highest ranking officials in
the province did not meet as regularly as expected, which at times delayed action on reforms that
required coordination across implementing units; ii) the Procurement Review Committee formed
to oversee the contracting of TA management firm did not meet regularly and delayed the
procurement process significantly and execution of TA component was stalled (TA management
firm was only hired in the last year of project implementation); iii) inadequate attention was paid
by GoPunjab to build capacity of organizations in the education sector such as PEC, PTBB,
PEAS, DSD and PMIU seriously curtailing their ability to perform mandated functions
effectively; and iv) delays in releases of funds (e.g. PEF) made it harder for sister organizations to
successfully plan and execute their programs.

24
(b) Implementing Agency or Agencies Performance
Rating: Satisfactory
5.2.3 School Education Department (SED) and its Program Monitoring and Implementation
Unit (PMIU) demonstrated strong commitment and ownership to achieving PESP development
objectives. PMIU performed a key role in the preparation and implementation of reform programs
supported by PESP. SED, PMIU and DPs had developed a strong partnership in spearheading the
reform agenda with implementation support from PMIU in instituting politically difficult reform
programs (merit based recruitment). The role of PMIU in monitoring and implementation of core
education reform programs while being seriously understaffed is nothing less than commendable;
however, SED should have supported adequate staffing of PMIU particularly in procurement and
environmental management. Monthly monitoring and school census data collected at the district
level is processed, analyzed, and disseminated by PMIU to districts and provincial leadership.
This data has been effectively used in preparing district level ranking of indicators to make the
districts accountable to the provincial leadership on key performance indicators.

5.2.4 The SED/PMIU met 29.5 DLI targets (a significant achievement); the 0.5 unmet DLI
target related to the upgrading of primary schools to middle schools. Capacity to implement the
School Upgradation and provision of Missing School Facilities at the district level was lacking
with delays in release of funds from the province to the districts further delaying implementation
on these important program interventions. In addition, the SED/PMIU could have paid more
attention to adhering to the agreed protocols in implementation of the reform initiatives in PESP.
SED/PMIU generally complied with all covenants with the exception of two project covenants;
the first, related to the establishment of a teacher accreditation and licensing body which was
dropped at restructuring because of lack of clarity in the role of federal accreditation body for
setting teaching standards, versus the role of provincial government after the 18
th
amendment
(devolution of powers to the provinces) during project implementation. In addition, taking
account of the political difficulties the teacher licensing aspect of the covenant was redesigned
and incorporated in PESP-II; under the new design the conceptualization of a teacher certification
and licensing regime is proposed through a highly collaborative process and will stop short of
establishing an accreditation body (Act of provincial parliament). Second, the covenant on
introduction of guidelines for constructing of new schools became redundant during project
implementation since the priorities of the GoPunjab changed from building new schools in the
medium term to improving existing infrastructure facilities.

(c) Justification of Rating for Overall Borrower Performance
5.2.5 The overall performance of the Borrower is rated moderately satisfactory, considering the
above assessment of the government performance (moderately satisfactory) and implementing
agency performance (satisfactory).
6. Lessons Learned

6.1 Significant lessons learned from the PESPs experience that had already been included in the
design of PESP-II are listed below.

Donor Coordination: PESP provided Development Partners (DPs) with a viable
platform to provide consistent and concordant policy advice to the GoPunjab under a
common results framework, jointly designed with the GoPunjab. This partnership is
exemplary because all the three development partners (DfID, CIDA and WB) held joint
dialogue with GoPunjab under PESP and jointly designed the support to the new program
(PESP-II).

25
Instrument Design: The results-based design of PESP, specifically the use of DLIs with
predefined implementation progress and performance targets, has helped the sector
dialogue to focus on the most critical factors necessary for the achievement of project
development outcomes. The results-based investment operation improved donor
coordination by linking implementation support to government strategy under a common
results-framework (DLI matrix) and reducing the Governments reporting burden.

Demonstration of Results: Strong political commitment and ownership are critical for
successfully steering a sector-wide reform program. Significant and positive results
demonstrated by the PEDPCs proved to be the lynchpin for sustained political ownership
and commitment, even, with a new government assuming office in 2008.

Intensity of Bank Engagement: Continuous and intensive Bank engagement across the
reform program and technical and advisory support to SED/PMIU and sister entities
(PEC, PEAS, DSD and PTBB) resulted in timely identification and resolution of
challenges during implementation.

Partnership with the Private Sector: Rigorous evidence demonstrates that the public
private partnership initiative in Punjab has generated large and quick gains in both
enrollment and achievement. These results have indicated and reinforced the commitment
of the GoPunjab to partner with the private sector to effectively address shortfalls in
education outcomes, particularly in un/underserved rural communities (through new
schools program).

Capability Traps: A realistic assessment of the district and provincial capability to
implement reforms is important to inform the design and sequencing of the reform
program for maximum possible impact; e.g. unrealistic expectations about the capacity
of: i) the School Education Department (SED); ii) the districts to undertake civil works
for missing school facilities and school upgradation; iii) the Punjab Education
Assessment System (PEAS) for test design, analysis, and dissemination of findings to key
stakeholders and the public; and iv) the province to establish teacher accreditation,
certification and licensing system.

Results Framework: Clear articulation of linkages in formulating indicators, DLI
targets and protocols is important to focus efforts on factors that are critical to the
achievement of the project objectives. For instance, if the goal is to improve quality of
learning assessments over the project period, then simple administration of tests and
dissemination of results though necessary are not sufficient for meeting the desired DLI
targets. In addition the DLI targets need to be formulated with precision to avoid any
ambiguity and to ensure that the agreed protocols are also adhered to. In PESP-II the DPs
have jointly designed a tighter results framework with greater emphasis on generating
reliable data on student achievement through independent tests of grade-4 and grade-5
students for a reasonably-sized, representative sample government schools and publicly
supported low-cost private schools.

Project Development Objectives: Stronger analytical work is desired to select the set of
PDO indicators, with greater rigor towards establishing, measuring and forecasting the
extent of change expected on these indicators as result of the successful achievement of
the DLIs. Ratio-based indicators should not be included as PDOs because of sensitivity of
these indicators to slight changes in numerator and denominator resulting in volatility and
noise.

26
Staff Turnover: Inadequate staffing of the implementing agency with vacant positions in
critical areas for elongated periods such as procurement, contract management and
environment management can adversely affect project implementation.
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners
(a) Borrower/implementing agencies
7.1.1 The Borrowers assessment of the project is included in Annex 7. No substantive issue
has been raised. The Borrowers ICR has referred to the status of two project covenants that were
dropped or restructured (see paragraph 5.2.4).

(b) Co-financiers
7.2.1 DfID and CIDA provided valuable comments on draft version of the ICR (see Annex 8)
and their comments have now been incorporated in the document.

(c) Other partners and stakeholders
Not applicable.

27
Annex 1. Project Costs and Financing
(a) Project Cost by Component (in USD Million equivalent)
Components
Appraisal Estimate
(USD millions)
Actual/Latest Estimate
(USD millions)
Percentage of
Appraisal
Salary Related Expenses 3,032.80 4,056.64 133.76
Punjab Education
Foundation (PEF) 140.00 202.59 144.71
Girls Stipends 37.50 31.43 83.82
Grants to School Councils 55.00 42.23 76.78
Performance Based
Incentive Program 40.00 13.71 34.28
School Councils' Capacity
Building Program 15.00 9.09 60.62
District Capacity Building
Program 1.92 0.49 25.64
Monitoring Systems (CM
Monitoring force) 17.80 5.51 30.96
Technical Assistance 10.00 2.41 24.14
Total Project Cost 3,350.02 4,364.11 130.27
Total Financing
Required 3,350.02 4,364.11 130.27

(b) Financing
Source of
Funds
Type of Co-
financing
Appraisal Estimate
(USD millions)
Actual/Latest Estimate
(USD millions)
Percentage of
Appraisal

Borrower 2,934.32 3,904.31 133.06
IDA 350.00 401.82 114.81
DfID Parallel 65.70 40.43 61.53
CIDA J oint - 17.56 -
Total
Financing 3,350.02 4,364.11 130.27
Notes:
(1) Project Costs as presented in PESP PAD and this Annex represent EEPs under the Project. The
sum of these EEPs does not represent total PESRP-I costs.
(2) USD million equivalent calculated using PKR or EUR exchange rate as at J une 30 for each fiscal
year. Discrepancies in figures may occur due to difference in exchange rate on actual day of
disbursement.
(3) DfID financing estimate at appraisal calculated using GBP-USD exchange rate as at April 30,
2009 (date of effective exchange rate in PESP PAD).
(4) Appraisal estimate of Borrower financing differs from the amount in the PESP PAD as the DfID
financing at appraisal had been included under Borrower financing, and now in this table for the
ICR, the DfID financing is shown separately in both the appraisal and actual/latest estimates.
(5) DfID had committed GBP 50 million for 5 years at appraisal. The period of support was later
shortened to 3.5 years. In the middle of the PESP, DfID increased the total amount of the grant
to GBP 80 million which was linked to additional targets set by DfID on missing facilities in 5
districts. The figures reported in the table for DfID financing are approximate.

28
Annex 2. Outputs by Component
Punjab Education Sector Project (PESP) and Punjab Education Sector Project Additional Financing (PESP AF)
Disbursement Linked Indicators (Targets) and Key Covenants for PESP and PESP AF

Overall Achievement:
All ten of the FY2008/09 DLIs in PESP were satisfactorily met by the GoPunjab.
Nine out of ten DLIs were achieved for the FY 2009/10one of the DLIs on school-upgradation programwas not achieved. The DLI
was anticipated to be met in FY 2010/11 but due to floods target was achieved in 2011/12.
Eight out of the ten DLIs were successfully met in FY 2010-11two DLIsmissing school facilities and school upgradation
programwere met in the subsequent year however, the GoPunjab was unable to meet the sub (target) for upgradation of schools
fromprimary to middle level. Disbursements for 9.5 DLIs were made for the FY 2010/11.
Additional Financing was apportioned equally across 10 DLIs for FY 2010/11.

Notes: Major comments are evaluative remarks on program elements if addressed could have had significant (trajectory-changing)
impacts, while minor comments relate to occurrences that might have increased/decreased the pace of implementation

DLI 1: Fiscal and budget management
The DLI for fiscal and budget management was met during the three program years.
Achievements Comments
Core sector programfor FY 2008/09 was approved by
GoPunjab and fully financed.
The GoPunjab had successfully prepared mediumterm
development plans for the education sector annually and
have aligned budgetary allocations with the medium-
termsector framework (MTSF)
FY 2010/11 sector programapproved with financing
levels in accordance with MTSF.

Major Comments
SED/PMIU prepared the MTSF and MTBF as agreed but
these documents, though reflected in provincial budgets,
remained largely stand-alone documents with limited value
addition.
Minor Comments
Despite devastating floods in July-Aug 2010 releases against
core education programs were preserved;
Though sector programs were fully financed there were some
delays in transfers but overall project expenditures remained
on track.
DLI 2: Improving teacher performance
The DLI for teachers incentives program was met during the three program years.
Improvers Program:
Improvers programunder a tight design and incentive
criterion introduced as a pilot in 600 schools in three
districts; the programwas tied to a rigorous impact
evaluation and is continuing under PESP-II
Improvers Program:
In FY 2011-12 incentive payments were transferred directly to
1028 teachers' bank accounts under improvers' program. Impact
evaluation underway.
High Achievers Program:
Incentives criteria developed through simulation exercises
in two districts and were applied by SED for disbursement
of teachers incentives in FY 2009/10.
In FY 2010/11, the criterion was revised based on the
findings of the TPV, and an amount of PKR 721 million
was disbursed against total allocation of Rs.900 million for
incentives in line with the agreed criterion.
Throughout the implementation phase GoPunjab and DPs
regularly discussed compliance with the agreed criterion.
With the help of an independent assessment in FY 2010/11
DPs were able to make a convincing case and shielded the
programfromthe pressure to introduce subjective
elements in the bonus criterion.
High Achievers Program:
Major Comments
Non-compliance with the agreed criterion for FY 2009/10; a TPV
conducted by the DPs showed that the incentive parameters were
not complied with primarily due to design issues
Fiduciary concerns with the transfer of funds through district
administration could have been avoided by transferring funds
directly to the teacher accounts.
In FY 2011/12 the GoPunjab decided to eliminate the costly but
low-return teacher cash-bonus program(high-achievers
program).

DLI 3: School improvement (provision of missing school facilities)
The DLI for provision of missing school facilities was met during the three program years.
1160 schemes were completed in FY 2009/10 against the
target of 1,000 schemes
target of 1,500 schemes
Major Comments
Environmental checklist was included in PC-1 for all schemes.
Slow pace of implementation has remained a serious concern with
delays in transfers of funds particularly in FY 2010/11
In the middle of FY 2010/11 a notification was issued by SED to

29
target of 1,500 schemes. change the method of selection and approval of schemes and the
funds for these schemes were placed at the disposal of MNA/MPA
instead of the agreed SDA account. However, this was later
reversed.
Only 22 of 153 schemes sampled for TPV of schemes completed
in FY 2010-11 were found to have been completed using whole
school approach. Only 128 of the 153 schemes were found to be
completed.
2,810 schemes were started for FY 2011 for provision of missing
facilities. Out of these schemes 409 schemes were in the list sent
by PMIU.
Minor Comments
No independent assessment was conducted in FY 2009/10 and
2010/11 to check whether the selected schemes complied with the
agreed criterion.
DLI 4: Increased access to higher level of education (School upgradation)
The DLI was met in the first program year, not met in FY2010/11 and partially met in FY 2011/12
Since FY 2009/10, 972 schools were upgraded from
primary to middle against a target of 1,400 and 578
schools were upgraded frommiddle to high against a
target of 400.
Major Comments
Non-compliance with the selection list prepared by PMIU based
on third party verification per the agreed criteria with the DPs. Out
of total schemes of 682, 44 schools belonged to the list sent by
PMIU (TPV findings).
Delays in transfer of funds for implementation of upgradation
schemes fromprovince to districts.
Weak capacity at the district to implement these schemes in a
timely manner.
Minor Comments
In FY 2010/11 only 116 schemes for primary to middle and 47
frommiddle to high were implemented; flood relief and
rehabilitation work diverted construction efforts.
DLI 5: Provision of textbooks to public schools
The DLI for provision of textbooks was met during the three program years.
Monthly monitoring data for Sep 2008 shows 95% with
free textbooks against a target of 80%.
Monthly monitoring data for April 2009 shows 97% with
Monthly monitoring data for April 2010 shows 96% with
Six new textbooks have been developed under the new
curriculumguidelines.
Major Comments
Though the overall delivery of textbooks has been successfully
achieved there are still operational issues and delays at each stage
of the process. Efforts to make up for delays at the early stages of
the delivery process may help improve the efficiency at later
stages.
Weak capacity in Punjab Textbook Board to field test textbooks
according to agreed protocols.
Inadequate use of TA funds to enhance the capacity of textbook
board to align all textbooks with the new curriculumwithin
stipulated timelines.
Minor Comments
Weak record keeping capacity at tehsil warehouses.

DLI 6: Girls Stipend Program
The DLI for provision of girls stipends was met during the three program years.
According to monthly monitoring data more than 90% of
eligible girls received the stipend amount for the three
programyears.
As of FY 2011/12 385,000 beneficiaries were receiving
stipends in 16 low-literacy districts of the province.
Major Comments
Impact Evaluation results show not only gains in transition rates
fromprimary to secondary schools but positive effects on boys
enrollment as well in these schools. There is also suggestive
evidence of delay in marriage and low child birth-rates for cohorts
exposed to the program.
Minor Comments
The stipend delivery process which is designed to take less than 3
months was observed to require more than 5 months for the fixed
process of stipend by the TPV conducted in 2011.
DLI 7: Support to low cost private sector schools

30

The DLI for support to low cost private sector schools was fully met during the three program years.
Supported 1,085 private schools against target of 1,000
schools under PEF in FY2008/09. In the same year PEF
supported over 40 NSP against a target of 40 schools;
Supported 1,341 private schools against target of 1,300
schools under PEF for FY2009/10. In the same year over
131 schools were supported under NSP against a target of
150 schools;
In FY 2010/11 supported over 1,768 under PEF exceeding
the target by about 200 schools, the coverage of NSP was
also increased to 200 schools.
More than 1 million students enrolled in PEF schools.
Major Comments
Impact Evaluation results show that Foundation Assisted Schools
(FAS) programhas generated large gains (in the subsample of
programschools examined) in enrollment and school inputs
(roughly a gain of 40%) and student achievement (a gain of 0.3
0.5 standard deviations) within two years
Minor Comments
Delays in transfer of funds to PEF as per MTSF.
DLI 8: Strengthening school level management
The DLI for strengthening school level management was met during the three program years.
RSP support provided to school councils during program
years as per agreed schedule.
School council policy/guidelines were distributed to all
schools.
Funds transferred to school council accounts within the
first quarter in FY2009/10 and FY2010/11.
Major Comments
The performance of the RSPs has not yet been evaluated against
the agreed performance indicators (primary enrollment, reduction
in teacher absenteeism, increase in retention rate, and increase in
completion rate).
Minor Comments
Low literacy of the council members is identified as a major
impediment to the effective functioning of the school management
council.
Supervision of Rural Support Programs to conduct capacity
building of School Councils was deficient (particularly for the FY
2010/11).
DLI 9: Public school teacher recruitment
The DLI for public school teacher recruitment was fully met during the three program years.
Recruitment of 33,299 teachers was carried out in 36
districts according to merit based policy.
Major Comments
Blanket rationalization policy where teachers are posted on STR
ratios (needs) is unlikely to work in this contextwith a large
share of zero (supported by NCHD teachers) and one-teacher
school and high teacher absenteeismrate placement of teachers on
STR alone are likely to be strongly contested by local
constituencies.
DLI 10: Examination and Assessment systems
The DLI for examination and assessment systems was met during the three program years.
During the course of the Project, PEC exams have been
regularly conducted by March every year.
Funds transferred to PEC and PEAS in accordance with
MTSF.
In the Feb 2011 assessments in social studies, mathematics
and Urdu were administered in 935 schools across Punjab
(on a district representative sample) among 14,000 grade 4
students. An analysis report was prepared in FY2011/12
and is in the process of dissemination.
Minor Comments
No technical assistance provided to PEC and PEAS for
procurement of technical staff and requisite softwares.

31
Annex 3. Economic and Financial Analysis

Approach at appraisal: One of the primary objectives of PERSP was to increase primary and secondary
enrollments (specifically of girls). Improving the quality of education and strengthening the systems for
measurement of student learning were the other main objectives of PERSP/PESP. Expected benefits of
the program included: i) increased lifetime earnings of additional enrollees at the primary, middle and
secondary level (both government schools and PPP program); and ii) lifetime increase in earnings of
additional children graduating from SSC (matriculate) examination. Expected costs included: i) costs of
the interventions supported under PESP (public costs); and out-of-pocket expenses of additional enrollees
in the system as well as the opportunity cost of forgone earnings. Internal rate of return approach was
used to appraise the investments under PESP. Returns to primary, middle and secondary education
(overall and females) were estimated using the PSLM survey 2006-07 and PIHS 2001-02.

Assumptions for Economic Analysis at Project Appraisal
Growth in real earning during FY 2009-2011: The forecasted growth rates in real annual
earnings for all levels of education (primary, middle and secondary) were assumed to be 5%.
Pass rate of secondary school graduates: This was assumed to improve by 5% due to various
interventions in quality aspects of education. Motivation of using 5% value was not clearly
articulated in the project file. The project document further noted that secondary pass rate is
sketchy and there is no secular rising trend of pass rate since 1999
Projected Expenditures: Expenditure estimates provided in MTSF 2008-2011 were used as
overall public expenditures on school education. Forgone earnings were added to the public
expenditures to estimate the overall projected costs.

At appraisal the Bank estimated the expected benefits of life-time earnings of three sets of additional
beneficiaries (the numbers projected to increase because of PESP): i) additional enrollees from the
achievement of 2010-11 NER targets (primary and middle); ii) increase in PPP enrollments; and iii)
additional matriculate graduates due to improvements in pass rate by 5% points. The costs were estimated
as the sum of current and development expenditures on the new initiatives in school education added to
the direct costs of schooling (including forgone earnings). The estimated IRR at appraisal was 9 % (PAD,
page 16).

Economic re-evaluation and Scope of data inputs: The present discounted value (PDV) approach is used
to re-evaluate PESP. For education investments where the returns of a project span over the lifetime
earnings of an individual PDV of net benefits is generally better rule to appraise investment decision as
IRR has serious limitations in multi-period cases. The same methodology has been used to appraise
PESP-II investment decision. A positive net PDV is necessary and sufficient for the investment decision.

Data for analysis, as was the case at appraisal, is largely obtained from province-representative household
sample surveys. The present values of key variables used in the Cost Benefit Analysis (CBA) are
estimated based on 2010-11 PSLM survey data which covered 32,380 households in Punjab. For
estimating changes in key variables over time, we estimated annualized growth rates from changes in
these variables between 2007-08 and 2010-11 data. Time-series data on expenditures on public education
system are obtained from government sources. PDV of benefits is estimated by constructing age-earning
profiles for salient school completion levels, as is the case at appraisal, namely: (1) less than primary
school completion; (2) at most primary school completion; and (3) at least secondary school completion.
These age-earning profiles are constructed separately for four population sub-groups which differ
significantly in their education and labor market experiences, namely: (a) male in urban areas; (b) males
in rural areas; (c) females in urban areas; and (d) females in rural areas. PDV of economic costs
considered comprises of: (1) schooling-related expenditures made by the household; (2) costs incurred by
the government in educating a child in government school or government-financed private schools; and
(3) the opportunity costs of forgone child labor earnings. Also a richer set of assumptions are used than at

32
appraisal to come up with more precise estimates of incremental net benefits from investing in PESP. Key
assumptions are outlined here:

Urbanization rate: The annualized population urbanization rate in Punjab over the period
2007/08-2010/11 was -0.0004%.
Discount rate: The rate at which expected economic benefits and costs are discounted to the
present period is assumed to be 10% --Pakistan deposit interest rates adjusted for inflation have
remained above 10% over the period 2007-08 to 2010-11.
Unpaid family workers: The age-education level-earnings profile of unpaid workers is artificially
constructed by applying a reduction factor of 75% to the corresponding profiles for self-employed
workers. For children ages 10+the reduction factor of 50% is applied to unpaid child workers.
Real Annual Earnings: The annual growth rate in real annual earnings in wage and self-
employment is assumed to be equal to the annualized growth in real annual earnings in the
respective employment type over the period 2007/08-2010/11 for workers ages 15-64. Growth
rate for self-employment earnings was applied to the constructed earnings in unpaid employment.
Schooling length: For each completion level was assumed to be equal to the modal number of
grades completedfor children ages 16+the modal grades completed were 0, 5 and 10, less than
primary school completion, at most primary school completion, and at least secondary school
completion, respectively.
Secondary School Completion Rates: With PESP annualized change in the probabilities of
completing at least secondary school is 12.1%, -0.2%, 13.5%, 0.6% points for the male-urban,
female-urban, male-rural and female-rural population groups respectively. Without PESP
secondary school completion probabilities for these groups at project completion are estimated
based on the annualized change in the same probability over the period 2004-05 to 2007-08.
Public Expenditure on Schooling: GoPunjab expenditures on education have increased
significantly over the project period (roughly 20% p.a.)this increase is by and large due to 50%
increase in the salaries of the employees. To account for this increase only 25% of the increase in
per-student expenditure in public schools is attributed to the program costs.

Re-evaluation Findings: As was the case at appraisal the economic benefits of schooling are estimated by
using life time earnings, and the economic costs of schooling are estimated by using schooling
expenditures, and, given the context, forgone child labor earnings. Setting discount rate equal to the
deposit interest rate of 10% the ICR team estimated PDV of benefits to be equal to PKR 3,651 and the
PDV of costs as PKR 1,687 (at 2000-2001 prices).

Comparison: At appraisal, the IRR of the investments was estimated at 9%. With a 10% discount rate at
completion the NPV of PESP is PKR 1,964 per child implying that the IRR at completion must be greater
than the value estimated at appraisal.

33
Annex 4. Bank Lending and Implementation Support/Supervision Processes
(a) Task Team members
Names Title Unit
Lending
Ameer Hussein Naqvi Consultant SASED
Amna W. Mir Program Assistant SASHD
Anwar Ali Bhatti Financial Analyst SACPK
Asif Ali Senior Procurement Specialist SARPS
Ernesto Sanchez-Triana Lead Environmental Specialist LCSEN
Fawad Shams Consultant SASED
Felippe Barrera Sr. Economist HDNED
Furqan Ahmad Saleem Sr Financial Management Specialist AFTFM
Hanid Mukhtar Senior Economist SASEP
Huma Ali Waheed Operations Officer SASED
Irajen Appasamy Senior Operations Officer AFTED
J avaid Afzal Senior Environmental Specialist SASDI
M. Omar Khalid Consultant SASDI
Madiha Ahmed Consultant SASED
Martin Serrano Counsel LEGES
Michelle Riboud Consultant IEGPS
Priyanka Pandey Consultant SASED
Qaiser M. Khan Sector Lead Economist AFTSP
Shaheen Malik Research Analyst SASEP
Sofia Shakil Senior Education Specialist ADB
Tahseen Sayed Khan Country Manager SACNP
Uzma Sadaf Senior Procurement Specialist SARPS
Zia Al J alaly Senior Social Development Spec SARDE
Supervision/ICR
Amna W. Mir Program Assistant SASHD
Anwar Ali Bhatti Financial Analyst SACPK
Asif Ali Senior Procurement Specialist SARPS
Ayesha Khan Consultant SASED
Bertha M. Mburugu Program Assistant LCSPS
Dhushyanth Raju Sr. Economist SASED
Elfreda Vincent Program Assistant SASHD
Felippe Barrera Sr Economist HDNED
Furqan Ahmad Saleem Sr Financial Management Specialist AFTFM
Hanid Mukhtar Senior Economist SASEP
Huma Ali Waheed Operations Officer SASED
Izza Farrakh Consultant SASED
J avaid Afzal Senior Environmental Specialist SASDI
M. Omar Khalid Consultant SASDI
Mariam Qaiser Consultant SASED
Mohammad Khalid Khan Program Assistant SASHD
Naveed Hasan Naqvi Sr. Education Economist SASED
Randy L. Hatfield Consultant SASED
Saeeda Sabah Rashid Sr Financial Management Specialist SARFM
Salman Asim Consultant SASED
Sofia Shakil Sr. Education Specialist ADB
Surendra K. Agarwal Consultant SASED

34
Umbreen Arif Senior Education Specialist SASED
Zia Al J alaly Senior Social Development Spec SARDE
Zubair K. Bhatti Senior Public Sector Management Specialist SASGP

(b) Staff Time and Cost
Stage of Project Cycle
Staff Time and Cost (Bank Budget Only)
No. of staff weeks
USD Thousands (including travel
and consultant costs)
Lending
FY08 25 75,588.84
FY09 58 158,338.55
Total: 83 233,927.39
Supervision/ICR
FY 10 61 115,007.63
FY 11 61 151,077.49
FY 12 29 49,904.72
Total: 151 315,989.84

35
Annex 5. Beneficiary Survey Results

(if any)

None

36

Annex 6. Stakeholder Workshop Report and Results
(if any)

None

37
Annex 7. Summary of Borrower's ICR

The Punjab Government had entered into a Project Agreement with International Development
Association (IDA) dated J une 9, 2009 bearing Credit No. 4586-Pak in connection with the Financing
Agreement of the same date between the Government of Pakistan and the IDA for financing Punjab
Education Sector Project (the Project) cost amounting to US $ 350 million for a period of three years.
CIDA is contributing $ 18 million as grant under same terms & conditions. Moreover, CIDA agreed to
provide $ 50 million under additional financing on the request of Government of Punjab in the aftermath
of last year's devastating floods. The Government of Pakistan also entered into a Grant Agreement dated
December 16, 2009 with the UK Government through the Department for International Development
(DfID) for a grant of 80 million for a period of five years for the Project. The Project supports Punjab
Education Sector Reform Program (PESRP) initiated in 2003 and had two components: (i) Component 1
Program Financing relates to the total financing provided by the World Bank and DfID and (ii)
Component 2 Technical Assistance to strengthen existing capabilities for implementation and
monitoring of the sector program. The Projects development objectives were to improve access and
equity, and the quality and relevance of education in Punjab.

a. PERFORMANCE UNDER REFORM PROGRAM PILLARS

1. DLI 1: Fiscal and Budget Management

DLI Description:
Core sector program for FY 09, 10 and 11 approved by SED, P&D and FD, and fully financed in
accordance with the Medium Term Sector Framework (MTSF).

Achievements/Challenges
Funds were released accordingly and DLI was met. Issues:
Capacity issues
Issues in data collections

2. DLI 2: Improving Teacher Performance
DLI Description:
2009-2010: Data stimulation exercise in two districts for the implementation of a province wide program
to provide performance linked incentive to teachers in the form of cash award to 20% highest performing
schools in each districts
2010-11: Disbursement of performance linked awards for FY 10 to 20% highest performing schools
based on approved criteria and validated by third party. Program expended to include a category that
dedicates 20% of the total award amount to schools that show most improvement
2011-12: Disbursement of performance linked awards for FY 11 to 20% highest performing schools and
to most improving schools in all districts based on approved criteria and validated by third party.

Implementation & Operational Experience:
Activities include:
Formula Based selection of Schools based on (1)School Achievement (2) Test participation rate
and (3) Gain in enrollment
Development of criteria
Notification by the SED
Preparation of tentative list by PMIU
Notification of the 20% highest performing school by EDO Education

38
Disbursement of the incentive

Exercise was done in districts for implementation of the program in the whole province. The
disbursement of performance linked awards was successfully accomplished for the FY 10-11 to 20 %
highest performing schools based on approved criteria and an amount of PKR 721,395,593 was disbursed
but third party validation was not carried out. Achievers: 20% high achievers program was not continued
in the FY 11-12 so no disbursement was made against this achievers program.
Improvers' program:
Score cards distributed in all 600 schools of 3 pilot districts
Awareness campaign and teachers registration activity was also completed in the month of
October
100% bonus distributed to approx. 1000 beneficiaries teachers into their bank account

3. DLI 3: School Improvement

DLI Description:
2009-10: Provision of Missing Facilities
School Department begins implementation of the program to provide all missing facilities to schools on a
whole school approach basis.
At least 1,500 schools provided missing facilities on a whole school approach basis
An additional 1,500 schools provided missing facilities on a whole school approach basis and validated
by a third party.

Activities include:
Development of School Selection criteria
Circulation of needy schools lists to districts
Monitoring of schemes
Collection of progress reports and compilation

After implementation of the program 2,076 with cost of PKR 4097 million and 1967 were executed. In
FY 10, 1,855 schools were completed in aspect of provision of missing facilities. The DLI was met and
documents were provided to the World Bank. TPV was done by A.F.Ferguson and 1,739 schemes are
completed so far.

1,160 schemes were completed; delays due to late financial releases and pending schemes. The DLI was
met and 1,855 schools were completed regarding provision of missing facilities by using PKR 2,605
million.

Remarks:
1. Whole school approach should be continued.
2. Schools selection should be made from census data on facilities needed basis not on maximum
number of student basis.
3. Quality of work should also be monitored.
4. After completion of scheme the school must be visited by DMO/MEA.

39
4. DLI 4: Increased access to Higher Levels of Education

DLI Description:
2009-10: Up-gradation of schools
School Department prepares implementation plan and develops priority list of 1,400 primary schools and
400 middle schools identified for upgrading, as part of program for upgrading schools from primary to
middle, middle to high schools, giving priority to girls and rural areas
600 primary schools and 200 middle schools upgraded
An additional 800 primary schools and 200 middle schools upgraded; validation by a third party
organization

Activities include:
Development of School Selection criteria
Circulation of lists to districts for execution of schemes and their monitoring.

2009-10: 280 schools were up-graded according to the set criteria
2010-11: In FY 10-11 350 schools were up-graded and documents were provided to the development
partners.
2011-12: No as such schemes were taken up for up-gradation this year; however few schemes are in
progress from previous budgets.

5. DLI 5:Provision of Textbooks to Public Schools

DLI Description:
2009-10: DLI for FY 09 Free Textbooks delivered to at least 80 percent of public schools within the first
month of academic year beginning August 2008.
2010-11: DLI for FY 10 Free textbooks delivered to at least 90 percent of public schools within the first
month of academic year beginning April 2009 , validated by a third party organization
2011-12: DLI for FY 11 Free Textbooks delivered to at least 90percent of public schools within the first
month of the academic year beginning April 2010 and (2) commence field testing of selected new books
on a sample basis.

Activities include:
Placement of 1st and 2nd indent to PTBB, receiving of jackets at central warehouse, MOU between
PMIU and NLC for transportation of FTBs from Central Warehouse to Tehsil Warehouses, Distribution
of FTBs from Markaz to Schools.

Achievements/Challenges:
Monthly Monitoring for School for the month of September 2008 shows 95.10% students were
with free textbooks.
Monthly Monitoring for School for the month of April 2009 shows 97.38% students were with
free textbooks.
Monthly Monitoring for School for the month of April 2010 shows 96.35% students were with
free textbooks.

40
6. DLI 6: Girls Stipend Program
DLI Description:
Delivery of stipends to at least 80% of eligible girls (grades 6-10 in public schools) as per the following
schedule agreed with IDA.
Qtr By date
Oct-Dec07 Apr 108
J an-Mar08 J uly 108
Apr-J un08 Oct 108
J ul-Sep08 J an 109

Qtr By date
Oct-Dec08 Apr 109
Apr-J un09 Oct 109
J ul-Sep09 J an 110

Qtr By date
Oct-Dec09 Apr 110
Apr-J un10 Oct 110
J ul-Sep10 J an 111

Monthly Monitoring for School shows 90% students received stipend in all three Fiscal Years.
TPV conducted by A.F Ferguson

Need to strengthen coordination with DCOs to avoid delays in:
Transfer of funds into PSA
Delivery of stipend to girls students through postal authorities
Hiring of new staff by postal authorities to handle stipend activity
District level audit should be conducted to adjust balance amount

7. DLI 7: Support to the Low Cost Private Sector Schools
DLI Description:
2009-10: Over 1,000 schools supported under the FAS program, and over 40 supported under the NSP
program with appropriate resources from the budget of PKR 3bn. Transferred to the PEF
2010-11: Over 1,300 schools supported under the FAS program, and over 150 schools supported under
the NSP program with appropriate resources (PEF budget for FY10 approved in line with the MTSF
along with a timely quarterly transfer of allocated funds).
2011-12: Over 1,500 schools supported under the FAS program, and over 200 schools supported under
the NSP program with appropriate resources (PEF budget for FY11 approved in line with the MTSF
along with a timely quarterly transfer of allocated funds).

41
Activities:
Monitoring of FAS partner schools
Conduction of QAT
District Coordination meetings

Retention of Students,
Provision of amenities,
Conducive environment ,
Improvement in infrastructure,
Improvement in furniture.
Difference can be in enrolled and paid students

8. DLI 8: School Councils

DLI Description:
2009-10: 20% of public primary and middle SCs provided capacity building through partnership
arrangements with RSPs and receiving
2010-11: 70% of public primary and middle SCs provided capacity building through arrangements with
RSPs and receiving SCs grants in their accounts; and (2) operational guidelines for SCs management
disseminated.
2011-12: 95% of public primary and middle SCs in all 35 districts provided capacity building through
arrangement with RSPs, and receiving SCs grants in their accounts.

Achievements/Challenges:

According to the revised PC-1 the total number of schools was 56,552 out of which 17,063 schools were
allocated for capacity building in FY 2008-09 and 2009-10. The total number of schools (councils)
covered by the RSPs 15,663 which becomes about 28% of the total. The DLI stands accomplished.
In the 2nd phase i.e. FY 10-11 the number of schools allocated were 20,489 out of which RSPs imparted
capacity building to 18,969 which after adding to the 1st phase becomes 34,632. The average comes out
to be 61% of the total but due to up gradation etc the total number of schools during the 2nd phase
decreased from 56,552 to 53,591and it becomes 64.2% of the total. The operational guidelines for the SCs
were disseminated.
In the 3rd phase i.e. FY 11-12 the number of schools allocated were 19,000 out of which the RSPs
imparted capacity building to 16,747 which after adding the covered schools of the previous two phases
becomes 51,379. The average against the total of 56,552 is 91% however once again due to the
upgradation etc. the number of masjid maktab primary and middle schools shrinked to 51,699 when the
average is taken against the on ground /actual number of schools it is 99.38% as such the final DLI
covering the previous ones have been met beyond the fixed limit of 95%. The grants were duly
transferred to the SCs accounts.

9. DLI 9: Public School Teacher recruitment

DLI Description:
2009-10: Recruitment of 34,000 teachers initiated in all 35 districts; and completed in at least 2 districts
according to merit-based policy.
2010-11: Implementation of teacher recruitment as per the agreed recruitment plan.

42
2011-12: Implementation of teacher recruitment as per the agreed recruitment plan and validated by the
third party organization

Activities:
Preparation of recruitment policy
Advertisement of subject wise post announced
Preparation of software for recruitment
Collection of applications
Display of pre, post and final merit lists at Districts
Issuance of offer letters
Monitoring of the whole process
Regular collection of data

2009-2010: Recruitment of 33,299 teachers were carried out in 36 District according to the merit
2010-2011: Implementation of teachers recruitment was carried out as per agreed plan.
2011-2012: Recruitment is in process

10. DLI 10: Examination and Assessment Systems
DLI Description:
2009-10: Examinations for grades 5 and 8 conducted by the PEC for Academic Year beginning April
2008 in March 2009
2010-11: A province-wide mathematics assessment of students in grades 5 in a district-representative
sample of public schools successfully implemented by PEAS and fully financed appropriately technically
staffed PEC in Academic Year beginning April 2009.
2011-12: (1)A Province-wide mathematics, language and social studies assessment of students in grade 5
in a district-representative sample of public schools successfully implemented by PEAS in Academic year
beginning April 2010; and (2)Analysis of mathematics assessment data undertaken in previous completed
by PEAS.

43
b. Performance Under Legal Covenants

Covenants
GoPunjab will establish and maintain, throughout the
period of implementation of the Project, a provincial
steering committee, a Program Monitoring and
Implementation Unit, a quality coordination committee,
and District Steering Committees in all provincial districts.

On-lending arrangements: GOP shall make the proceeds of
the credit available to GoPunjab in accordance with the
provisions of the Financing Agreement and GOP on-
lending policies and budgetary procedures, under the same
term of reference and conditions agreed between IDA and
GOP in the Financing Agreement.

GOP and GoPunjab shall ensure that the project will be
implemented pursuant to the Environmental and Social
Management Framework and that no activities will be
carried out that might involve land taking or the
acquisition of land without the prior approval of the
Association. Notwithstanding the forgoing, if land
acquisition were required for project activities, GoPunjab
will consult with the Association and acquire such land
pursuant to the Land Acquisition Act (with the exception
of clause 17(4) - urgency/emergency clause) or as
donation or bequeath.

GoPunjab shall produce interim-unaudited financial
reports of the project on semi-annual basis to support
disbursements for eligible expenditures under the credit.

GoPunjab shall produce quarterly budget execution reports
for the entire education sector for monitoring purpose.

GoPunjab shall maintain a publically accessible website
showing procurement activities.

GoPunjab shall hold at least two Departments Account
committee meetings at the district level in each district per
fiscal year, by March 2010 for F.Y 08's advance audit
paras, March 2011 for F.Y 09's advance audit paras, and
Status
Provincial steering committee, project monitoring &
implementation unit, quality coordination committee
and District Steering Committees are maintained
throughout the period of implementation of the
project.

Covenant was met.

No such activity has been reported yet.

Submission of IUFRs to World Bank is a primary
responsibility of PMIU which shows the sources of
funds and their uses at Provincial as well as Districts
level. PMIU has completed the task during the life of
PESP-I as per prescribed schedule in Financing
Agreement.

Using PIFRA terminal installed in the office, PMIU
has maintained a system of regular reporting of
financial flow on expenditure by way of producing &
submitting Budget Execution Report (BERs) of entire
education sector to World Bank after every quarter on
the format, agreed between the Bank and the Punjab
Government.

Said website is developed and maintained.

PMIU has successfully completed the task of
conducting 2 DACs in each District every year and
51%, 65% & 70 % reduction of Audit Paras in each
District for FY 2007-08, 2008-09 & 2009-10,

44
March 2012 for FY 10's advance audit paras.

GoPunjab shall prepare, notify and disseminate a design
and execution manual for school construction by May 31,
2010.

GoPunjab shall continue implementation of the
Continuous Professional Development (CPD) program in
the 12 districts where the program is ongoing and expand
the program to all 35 districts by March 2011.

GoPunjab shall establish an autonomous provincial
accreditation board for teachers by March 2012.

By no later May 31, 2010, prepare financial management
and procurement guidelines to be disseminated among
School Councils to be applied in the implementation of
school development plans.
respectively and submitted the Audit Analysis Report
to World Bank as a legal covenant of PESP-I.

Covenant was met.

Covenant was met.

Covenant is under process.

Covenant was met.

45
Annex 8. Comments of Co-financiers and Other Partners/Stakeholders

DfID reviewed the ICR and provided comments.

Comments of J aved Malik (Education Advisor, DfID) received on December 22, 2012 are as follows:

I think this a big moment to actually look back, celebrate achievements and ask questions for the future
course. As a whole there is lot to celebrate because in all honesty, without Banks programming and
deployment of its high quality staff Punjab could not have quality institutions like PIMU, PEF and CPD
framework which actually have enabled the system to stand out among others. So well done. Having said
this, I have three broad comments (and questions) to inform the report as a whole.

The project as a whole delivered on number of important reform areas, helped in consolidating
gains and improving donors coordination in a more productive way.
As a whole, the report right in giving a sense that the programme was well managed and delivered as a
whole because this programme helped in continuing PESP reform, deepened its support for private sector,
continuing to remove some of the access barriers ( free books, stipends) and commitment to demand side
measures like school councils. Overall, government spend in education sector considerably gone,
monitoring system continue to perform better and donor coordination has been great with actually number
of occasions where teams at DfID-WB-CIDA collaborated really well. Actually if donor coordination in
education sector in Punjab is an example for many other sectors and something possibly the report can
emphasize further.

A more robust take is needed to strengthen passing comments on stagnation of access related
outcomes and slow progress on quality.
The report noted a weak linkages between DLIs construction and outcome matrix on page 24 which I
think is one of the key reason for stagnation of the outcomes in access ( see table 3, page 14) whereas the
report further conclude that objectives on quality assessments were also not met ( 3.3.13) leading to
generally low quality of education ( ASER says 7 out of 10 kids at class three cannot read), the report
need to take more through view of low access, low quality system being monitored by three donors. We
now know that most of the access gains in last five years were in the private sector, there is no mention of
what should we do differently to change this and what additional measures like the political oversight of
the reforms (road map) could or could not achieve. 17 meetings led by the chief minister and system
leaders in Punjab was not considered worth mentioned nor a comment that what differently all of us
should in improving implementation at district and provincial level which the report mention as capability
trap.

Can we put something on broad implications of the programme learning on implementation in the
report in the conclusion?
How differently should we manage then this kind of support to government where despite our efforts,
marginalization and quality is not picking up? Should we stay the course and if so how long? Have the
time come to challenge government on increasing spend at school level, make districts more effective and
provincial office work differently to help the program deliver for poor regions ( now that we know that
most out of school kids live in 11 districts and especially in rural areas). What is Banks knowledge about
countries with low GDP growth that how much time they take in at least ensuring we are showing
progress against exclusion in education system? We can even say that we will stay the course but we need
to state our inner assumptions clearly to allow for some usage of this report for Banks own policy
purposes too. This was a large investment $400 M for a large system and there is lot in terms of learning
from our own experience.

46
Comments of Nighat-u-Nisa (Education Advisor, DfID) received on December 21, 2012 are as follows:

ICR has adequately taken into account of PESP achievements as well as highlighted the challenges or
areas of slow/ no progress.

Nothing major to add except that roadmap is almost neglected in the ICR and has merely described as a
beneficiary of the data and there is no comment on its contribution to the PESP or broader education
sector. IT will be good to see some reflection on this aspect.

One fact checking, in two or two placed, DfIDs financing contribution is not matching with the overall
figure of 80 million. May worth adding a line also that DfID has frontloaded its program and finished it
in Dec 2012 instead of J une 2014 in order to align it with WBs PESP cycle.

CIDA reviewed the ICR and provided comments.

Comments of Noreen Hasan (Education Advisor, CIDA) received on December 24, are as follows:

Overall comments

The Report is quite comprehensive and provides a good overall picture of the issues that need to be
addressed in the next phase. It also provides a good assessment of lessons learnt and what needs to be
done better to achieve good implementation success in PESP-II. We agree with all the overall and specific
ratings for the program. Donor coordination under PESP also improved significantly in 2011 for which
the credit goes to the education team at the Bank. However, we would like to see more frequent
engagement on technical issues with the Government of Punjab, especially on quality concerns under
PESP-II.

Context at appraisal
The underutilisation of the development budget in Punjab is a consistent problem and is worrying because
it makes for a poor case for continued funding to the sector. There is a need to keep a vigilant eye through
the mid-year utilisation reports by the Finance Department to ensure all DPS can take up the issue early
with the Government during review missions. Independent reports by PILDAT show that Punjab has
displayed a poor track record as far as utilisation is concerned. The utilisation has dropped to 62 percent
in 2009-10 from 75 percent in 2008-09. While the magnitude of the educational challenge has increased
due to addition of school age children in every year, the Punjab government's investment has decreased.

PDO Indicators
Indicator 1: Overall NER primary level (5-9 age group)- We were looking for a more detailed analysis
(than on page 15 under section 3.2) of whether the floods of 2010 had an effect on the NER because the
floods mainly affected Rajanpur and DG Khan districts in Punjab. Is there a source that can be quoted that
demonstrates a negative trend on NER? The downward trend in NER has been very alarming. The DfID
funded Nielson Surveys on the other hand show an upward NER trend in 2011. Although these are small
sample surveys, some reference can be made to these findings until PSLM data becomes available. PSLM
has been shown to be a unreliable source of data for annual progress due to the delays in its publication.

Same comment as above for indicator 5: primary school completion rate. It sends a negative message to
management if the actual value achieved at the end of the project is lower than the baseline. However, the
shift in methodology from ASC to PSLM is noted.

47
Indicator 6: teacher absenteeism rate: the average value achieved has been 10% which makes the target
for teacher absenteeism in PESP-II at 15% rather un-ambitious despite the upcoming elections which will
take teachers away from the classrooms.

Intermediate Outcome Indicators
Indicator 1: Unless the MTSF is a more robust document outlining the Govt of Punjabs education vision,
it remains a poor planning document and a poor indicator of medium term goals for the SED. The recent
draft of the School Education Sector Plan is now available. The Report could make reference to this draft
as the Secretary School Education Department now realises the importance of medium to long term
planning for better coordination with the Departments of Finance and Planning for education financing in
the province.

Key factors affecting implementation and outcomes
In terms of instrument design, CIDA was quite pleased with how the DLIs allowed the linkage of
disbursements to the achievement of results. This focus on results based implementation was a key
element of the success of PESP. The withdrawal of funds for the partially unmet DLI on school up
gradation also gave the Government of Punjab a clear message that funds would not be forthcoming for
non-achievement of results. We are hoping that PESP-II will see an even better success rate because of
the tweaking and modifications to the DLI design instrument. However, project covenants did not see the
same success as the DLIs, especially the teacher certification and licensing covenant which was very
disappointing.

Para 2.1.5 could make a reference to improved donor coordination through joint review missions.
However, there is still more room for improvement as the reviews are always Bank driven and sometimes
do not allow the other DPs to raise issues that might be outside PESP but directly linked to better
implementation of the overall education reform agenda of the Government.

The Report also does not make any reference to the DfID supported Punjab Chief Ministers Education
Reform Roadmap. Despite the early focus of the Roadmap Reform on increasing efficiency of the public
education system, the recent shift towards achieving better quality outcomes is encouraging and has to be
acknowledged as an important development during the implementation phase of PESP. The regular stock-
take meetings chaired by the Chief Minister have focussed attention on some important issues (for
example, improved quality for retention including teacher qualifications, better resource utilisation,
increased education financing) and improved donor and inter-government coordination to a large extent.
It also provided an important forum for policy dialogue with the Punjab Government.

Quality at entry
Last bullet point on the TA component and last bullet under 2.2.3: In our discussions with the TA firm,
Cambridge Education, they have pointed out that the reasons for the delays in implementation were also
because of poor design. Most of the issues identified in Package D had become redundant once the
staffing issues had been resolved and the PMIU and SED understood their role in ensuring that TA was
utilised well. Some flexibility in the design for mid-course correction would have been useful. It is also
linked directly to the larger issue of PMIUs capacity to lead research and analysis their own needs for TA.
We note that some of this has been covered later on page 12 of the Report under procurement.

Main factors that slowed down implementation
Some references to Government of Punjab data or reports on the impact of floods would help as CIDA
has had a difficult time explaining the downward trend in NER to its management.

Monitoring and Evaluation Design
Although the CMMF has been instrumental in generating reliable data, we should not forget that this is a
parallel structure to the existing District Education management structure that is not performing

48
satisfactorily. At some point there needs to be some synergy between the traditional EDOs and AEOs and
the DMOs to facilitate the collection of even more reliable data and to encourage the proper analysis and
use of this data at the district level.

Overarching themes
Although no studies are available on gender based violence in schools, child protection is an issue that
also needs to be addressed in Punjab. Of late, there have been a lot of reports in the media about corporal
punishment and field visits have indicated cases of bullying and violence against girls. At some stage
during implementation of PESP-II , there needs to be a study done to determine the real incidence of such
cases.

Institutional Change/Strengthening
Bullet 2: Although progress has been towards capacity building of the PMIU, some attention also needs to
be given to building capacity of the School Education Department because apart from the Secretary, it is
very difficult to engage with other officials of SED. More interaction between the PMIU and SED would
be helpful and would also allow PMIU to transfer responsibility for established programs such as the
distribution to text books to the SED.

49
Annex 9. List of Supporting Documents

Alam, A., Baez, J .E., & Del Carpio, X. V. (2011). Does Cash for School Influence Young Womens
Behavior in the Longer Term? Evidence from Pakistan. World Bank Policy Research Working Paper
5669.

Andrabi, Tahir, J ishnu Das, Asim Ijaz Khwaja, Tara Vishwanath, and Tristan Zajonc. (2007),
Pakistan: Learning and Educational Achievement in Punjab Schools (LEAPS): Insights to inform the
education policy debate. Washington DC: World Bank

Asim Salman (2012), Financial and Economic Analysis Sindh Education Sector Project ICR (the
methodology was borrowed from Raju Dhushyanth (2008/09) Financial and Economic Analysis Sindh
Education Sector Project)

Asim, Salman, Raju, Dhushyanth, Adil, Mariam, Pandey, Priyanka and De Icaza, Lorenza. (2012),
[Impact of information awareness and community engagement campaign on school outcomes in Sindh,
Pakistan], Baseline Survey: Raw Unpublished Data

Barrera-Osorio, F. & Raju, D. (2010). Short-run Learning Dynamics under a Test-based Accountability
System: Evidence from Pakistan. World Bank Policy Research Working Paper 5465.

Barrera-Osorio, F. & Raju, D. (2011). Evaluating Public Per-Student Subsidies to Low-Cost Private
Schools: Regression-Discontinuity Evidence from Pakistan. World Bank Policy Research Working Paper
5638.

Chaudhury, N & Parajuli, D. (2006). Conditional Cash Transfers and Female Schooling: The Impact of
the Female School Stipend Program on Public School Enrollments in Punjab, Pakistan. World Bank
Policy Research Working Paper 4102.

Cheema, I., (2005), A Profile of Poverty in Pakistan, CRPRID Working Paper.

DfID Programme Evaluation of the Punjab Education Sector Programme, (2012)

Government of Pakistan, Finance Division (2009). Poverty Reduction Strategy Paper PRSP-II.

Government of Pakistan, Finance Division (2012). PRSP-II Period Progress Report, FY09-FY11.

Government of Pakistan, Pakistan Bureau of Statistics. Pakistan Social and Living Standards
Measurement Surveys, (2006/07 2010/11).

Hasan, A. (2010). Gender-target Conditional Cash Transfers: Enrollment, Spillover Effects and
Instructional Quality. World Bank Policy Research Working Paper 5257.

Horn, Robin S. (2009). Quality Enhancement Review Panel Report, Pakistan: Punjab Education
Development Program and Sindh Education Sector Reform Project.

Kabeer, A. (2012). PESP Third Party Validation Report on Environmental and Social Management
Framework.

Pakistan Country Assistance Strategy, FY06-09, April 4, (2006) (Report No: 35718-PAK)

50
Pakistan Country Partnership Strategy Progress Report, FY10-14, November 16, 2011 (Report No:
65286-PK)

Pakistan Country Partnership Strategy, FY10-13, J uly 30, 2010 (Report No: 53553-PK)

Pakistan Floods 2010 Preliminary Damage and Needs Assessment Report, November 2010.

PESP Additional Financing Project Paper, February 28, 2011 (Report No: 59122-PK).

PESP Aide-Memoires and letters to the Government (2008-2012)

PESP and PESP Additional Financing Restructuring Paper, May 15, 2012

PESP Financing and Project Agreements, J une 9, 2009 and J une 2, 2011 (Additional Financing)

PESP Implementation Status Reports (Seq. 01 07)

PMIU Progress Report, J uly-September 2009

Procurement Assessment of Punjab Education Sector (Draft). Avais Hyder Liaquat Nauman, December
31, 2009

Procurement Post Review Reports: PESP, Ernst & Young, (2011, 2012)

Punjab Education Sector Project (PESP) Project Appraisal Document, May 6, 2009 (Report No: 47642-
PK).

Punjab Examination Commission (PEC) Third Party Monitoring Study Report (2011). SAHE.

Third Party Validation of Missing Facilities Program, School Upgradation Program, School Council
Capacity Building Program, and Teacher Recruitment (2011). A.F. Ferguson & Co.

Third Party Validation of School Upgradation Program (2010). Avais Hyder Liaquat Nauman.

Gilgit
Chitral
Mardan
Peshawar
Kahat
Rawalpindi
Bannu
Mianwali
Khushab
Jhelum
Sargodha
Gujrat
Sialkot
Gujranwala
Bhakkar
Jhana
Lahore
Kasur
Faisalabad
Sahiwal
Multan
D.G.
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Bahawalpur
Bahawalnagar
Rahimyar Khan
Rohri
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BALOCHISTAN
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Approx. Li ne
of Cont rol
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AND
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TAJIKISTAN
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I N D I A
A F GH A NI S T A N
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PAKISTAN
PUNJAB EDUCATION SECTOR
PROJECT (PESP)
PROJECT PROVINCE
SELECTED CITIES
NATIONAL CAPITAL
MAIN ROADS
RAILROADS
RIVERS
PROVINCE BOUNDARIES
INTERNATIONAL BOUNDARIES
This map was produced by the Map Design Unit of The World Bank.
The boundaries, colors, denominations and any other information shown
on this map do not imply, on the part of The World Bank Group, any
judgment on the legal status of any territory, or any endorsement or
acceptance of such boundaries.

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